Law Society of Ireland Annual Report and Accounts 2007/2008

Contents Report of the president 3 Council of the Law Society 8 Report of the director general 10 Reports of the department directors 15 Facts about the profession 20

Reports of the Law Society committees 22 Standing Committees 23 Complaints and Client Relations Committee 23 Coordination Committee 24 Education Committee 24 Finance Committee 25 Money Laundering Reporting Committee 28 Professional Indemnity Insurance Committee 28 Regulation of Practice Committee 29

Non-Standing Committees 31 Arbitration and Mediation Committee 31 Business Law Committee 32 Conveyancing Committee 32 Corporate and Public Sector Committee 33 Criminal Law Committee 34 Curriculum Development Unit 34 Employment and Equality Law Committee 35 EU and International Affairs Committee 36 Family Law Committee 37 Gazette Editorial Board 38 Guidance and Ethics Committee 39 Human Rights Committee 39 Law Reform Committee 40 Litigation Committee 41 Probate, Administration and Trusts Committee 41 Public Relations Committee 42 Taxation Committee 43 Technology Committee 44 List of committees and members 45

Financial statements of the Law Society of Ireland 48 for the year ended 31 December 2007 The Law Society of Ireland Compensation Fund reports 68 and financial statements for the year ended 31 December 2007

Law Society personnel 76 REPORT OF THE PRESIDENT

2007/2008 4 Report of the President Plus ça change, plus c’est la même chose – it was ever thus.

Under our system, each president serves for one term and, by definition, writes one annual report. Naturally therefore, to prepare my report, I read those of my predecessors. The striking feature is the consistency of theme from year to year, and how each of us who have had the honour to be President of the Law Society reaches the same conclusions. Report of the President 5

Attending the Walter Swift Symposium on 16 July 2008 at Blackhall Place were (l to r): Law Society president James MacGuill, Chief Justice John L Murray, Innocence Project director Barry Scheck, Walter Swift and Niamh Gunn. The sympo- sium was held within weeks of the exoneration of Walter Swift, after 26 years of imprisonment in the US (Pic: Lensmen)

Firstly, it has been an honour and our practices to reflect current needs available legal aid. In each case, the a privilege to serve as president and seize present opportunities. As a focus of the research is the provision and, while it has not always been a profession, we have been down this of greater protection for the individual barrel of laughs, I wouldn’t change a road many times before. We have client – a core value of our profession. moment. Many colleagues were kind learned the lesson that constantly The Society had particular enough to commiserate with me, in improving the service we provide for concerns about the Immigration, the belief that the current ‘difficulties’ our clients is the best guarantee of Residence and Protection Bill and facing the profession made my year our own professional success. My made a lengthy submission to the in office more difficult. A number of immediate predecessor, Philip Joyce, government. It has, however, been points arise. Firstly, every one of my leads a task force to assist colleagues a very busy year for legislation predecessors has had challenges in identifying new opportunities on that directly affects the solicitors’ to face, and that simply comes with the one hand, and to provide sound profession. the territory. Secondly, one of the practice-management guidance on We have had the Civil Law wonderful things about our collegiate the other. (Miscellaneous Provisions) Act 2008, profession is that, at times of difficulty, which has made some detailed people really strive to pull together. Core values changes to the regulatory system. We The support from the profession has A constant theme in previous are awaiting the committee stage of been unbelievable. Finally, for those reports has been the surprise, even the Legal Services Ombudsman Bill, of you who share my terror at being to ‘insiders’, at the extent of work which promises to radically change asked to deliver a ‘funny’ after-dinner done by volunteer members of the legal landscape in Ireland. Last speech, it was a clear advantage to Society committees. This year was but not least, we have had Acht na be president in a year when nobody no exception. I want to pay tribute nDlí-Chleacechtóirí (An Ghaeilge) expected a Law Society figure to be to all our committee members, who 2008, abolishing the mandatory and humorous! During the year, while the give so generously of their time, archaic Irish examinations and putting media were obsessed with regulatory especially when practice conditions in their place a progressive and issues affecting a few, the Society are challenging. In the course of proactive scheme to advance the use kept its focus on the economic this year, their good work has led to of the Irish language. and practice issues concerning the publication of significant reports Tá lúchair orm a rá gur éirigh leis the majority – I believe we have following legal research, including an athrú ó bhrú a chur ar dhaoine go succeeded on both fronts. Clearly the launch of the e-conveyancing tacaíocht a thabhairt do dhaoine. changed economic circumstances proposal, the Law Reform Committee Tá borradh faoin tsuim sa are outside the control of individual proposal on environmental law, and, Ghaeilge atá ag mic léinn sa Scoil colleagues, but what is within our significantly, the report of the Legal Dlí, agus suim suntasach á léiriú collective control is the ability to adapt Aid Task Force on the scope of san ardchúrsa atá ullmhaithe do na 6 Report of the President comhghleacaithe atá ag cleachtadh had to be the visit of the judges from Pride and privileges cheana féin. northern Norway, whose government While there were many high points Beidh na cúrsaí seo ar fáil arís an is considering setting up a system in the year, for me personally the bhliain seo chugainn agus mholfainn of tribunals and who were (for some greatest moment of pride was to do chách feidhm a bhaint astu. ‘Mol reason) directed to Ireland in their learn that a wholly innocent American an óige agus tiocfaidh siad.’ quest for knowledge. They enjoyed man was released from prison having their meeting with us and left with a served 26 years of a sentence for a Reciprocal relations lot of information not easily gleaned crime he did not commit, largely due Moving from the national to the from textbooks! to the efforts of now colleague, and international, the Society continues At the time of writing, I still await then trainee, Niamh Gunn. to foster reciprocal relations with a reply from ex-president Musharraf Niamh most graciously sister organisations throughout to the Society’s letter of protest at his acknowledged the encouragement the world. These contacts provide treatment of the judges in Pakistan. she received from Law School access to invaluable expertise as to Continuing the international personnel, serving as a timely antidote how other jurisdictions have dealt theme, our conference in Budapest to those critics who maintain that with the difficulties we are now was a great success and I would lawyers are selfishly, rather than encountering. The regard in which like to repeat our thanks to keynote selflessly, motivated. The Society the Law Society of Ireland is held is speakers Barry Donoghue, John intends to engage on a more formal reflected in the fact that the Canadian Bruton and Brian Lenihan. Our level with the Innocence Project, Bar Association will hold its annual ever-efficient conference organiser, and its directors Barry Scheck and conference for 2009 here in Dublin James McCourt, is still monitoring the Madeline deLone, to both support from 13-16 August. I would urge all postbag for libel writs intended for our and learn from their invaluable work. colleagues who have an opportunity after-dinner speaker, Louth colleague I would like to particularly thank the to do so to assist in the running of and friend Dermot Lavery. Chief Justice of Ireland, Mr Justice the conference to make our Canadian Next year’s conference will be John Murray, for presiding over colleagues welcome, as they in turn held in Bilbao from 23-26 April 2009. a wonderful symposium last July have welcomed us. We are also The conference will be shorter by addressed by Niamh, Barry Scheck beginning work towards the holding one day and the timing has changed, and Walter Swift, which served as an of the IBA conference in Dublin in reflecting the fact that the first inspiration to us all. 2012. weekend after Easter is still holiday One of the great privileges of In the course of the year, time in Bilbao. We look forward to the presidency is the opportunity to the Society hosted many visiting opportunity of very good interaction welcome new colleagues to the groups of lawyers keen to hear our with the local colleagues there, who profession. This year, more than 500 perspective on various issues of have made the intended conference colleagues received their parchments concern to them. The ironic high point very welcome. at 12 ceremonies. While these are wonderful family occasions, they are also an important opportunity for us collectively to restate our core principles and, in these difficult times, to reflect on the many challenges and opportunities that do exist. I was impressed by the energy and application of our new colleagues, and our profession is in good hands. I would like to thank those who addressed the parchment ceremonies, including Professor Lonnie Rose, Brian Lenihan, Carol Coulter, Sir Brian Kerr (Lord Chief Justice of Northern Ireland), Turlough O’Donnell SC, Garda Commissioner

At the Law Society’s annual dinner on 11 April 2008 were (l to r): senior vice- Fachtna Murphy, Niamh Gunn, Moya president John D Shaw, president James MacGuill, then Minister for Quinlan (the undisputed doyen of Foreign Affairs and now Minister for Justice Dermot Ahern and junior our profession), Judge Michael Reilly vice-president Donald Binchy (Pic: Lensmen) (inspector of prisons), Report of the President 7

Fr Peter McVerry, Dr Maurice The performance levels and esprit president, senior vice-president, junior Manning (chairman of the Irish Human de corps are truly exceptional. While vice-president, director general and Rights Commission) and, at the time some of the pressures are highly deputy director general. I, therefore, of writing, colleague and now Minister visible – particularly, say, on the would like to thank Philip, John, for Justice, Equality and Law Reform regulatory or educational sides – Donald, Ken and Mary for their work Dermot Ahern has confirmed that he there is also immense invisible work during the year. “We have learned the lesson that constantly improving the service we provide for our clients is the best guarantee of our own professional success.” will address a future ceremony. A high undertaken in many other parts of I can say without hesitation point of the day for all concerned is the organisation, and all have earned that, in having Ken Murphy and Mary the address of President of the High equal credit. Keane as part of our professional Court Mr Justice Richard Johnson, A particular word of thanks, team, the Law Society of Ireland is who always manages to bring however, must go to Maria Hoey, the envy of law societies around the humour to the occasion while setting who started with the Society last year world, and justifiably so. My own challenges and telling home truths. in the unenviable position of secretary colleagues in MacGuill & Company On occasion, he was deputised for to the president. She has shown have been immensely helpful and by other members of the High Court remarkable ingenuity in coping with extraordinarily uncomplaining. I bench, to whom we are also grateful. my various foibles. hope it is not all being stored up for All important decisions are November! Credit where it’s due made by the Law Society’s Council, Above all, I want to thank my Each of my predecessors, I am sure, and I would like to thank my fellow wife Lisa and son Conor for their experienced the same trepidation Council members for their support patience through the year. when it came to expressing gratitude and ‘guidance’ throughout the year. for the hard work and input of Colleagues will be relieved to learn James MacGuill, various people. The fear, of course, that the president does not get his President is that someone will be left out and, own way all the time. given the inevitability of that error, On a day-to-day basis, decisions I apologise in advance. On behalf are made by the Coordination of you all, I want to thank the truly Committee of the Society, comprising excellent staff in the Law Society. the immediate past-president,

Guests at the Waterford Law Society’s annual dinner on 4 April 2008 included Law Society president James MacGuill and director general Ken Murphy, pictured here with Waterford Law Society president Morette Kinsella and Council member Tom

Murran (Pic: Ciaran Conneely) COUNCIL OF THE LAW SOCIETY OF IRELAND

2007/2008 Council of the Law Society of Ireland for the year ending 6 November 2008 9

President: James MacGuill Achievements during the year Senior vice-president: John D Shaw Junior vice-president: Donald P Binchy The Council met regularly throughout the year Council members: James Cahill, Paul E Connellan, John (reports from individual Council meetings are E Costello, Colin Daly, Maura Derivan, Gerard J Doherty, made available in the Gazette). During the course Patrick Dorgan, Niall Farrell, Stuart J Gilhooly, Gerard G Griffin, of the year, the Council has considered, directed Michael Irvine, Philip M Joyce, Liam A Kennedy, Martin G and played a pivotal role in the formulation of the Lawlor, Barry MacCarthy, James B McCourt, Simon J Murphy, Society’s position concerning the development Thomas Murran, Michelle Ní Longáin, Michele O’Boyle, Daniel of legislation affecting practitioners in areas such E O’Connor, John O’Connor, Kevin D O’Higgins, James as the Immigration, Residence and Protection O’Sullivan, Michael Quinlan, Moya Quinlan, Louise Rouse, Bill 2007, the Legal Practitioners (Irish Language) John P Shaw Bill 2007, the enactment of the Civil Law Past presidents: Owen M Binchy, Geraldine M Clarke (Miscellaneous Provisions) Act 2008 and the Legal Provincial delegates: Leinster: Andrew J Cody Services Ombudsman Bill 2008. The Council Munster: Frances Twomey also considered and approved the work, reports, Ulster: Margaret M Mulrine submissions and proposals of numerous Society Connaught: Rosemarie J Loftus committees, for example, the NALA-approved Dublin Solicitors’ Bar Association: John Glynn, John P practice note on solicitors’ terms and conditions of O’Malley, Alma M Sheehan engagement, and proposals for the development of Southern Law Association: Helen Collins, Patricia Harney, the Benburb Street site, as well as various Society Eamon Harrington, Mortimer Kelleher, Patrick Mullins initiatives, such as LawCare and the relocation of Law Society of Northern Ireland: James Cooper, Joe the Society’s regulatory functions. Donnelly, Rory McShane, John Pinkerton REPORT OF THE DIRECTOR GENERAL

2007/2008 Report of the Director General 11

It was in the headlines on 15 October 2007 that most solicitors first heard the name Michael Lynn. On that day, the Law Society obtained an order from the President of the High Court freezing Lynn’s accounts and transferring control of all the files in his practice to the Society in order to protect the interests of his clients. 12 Report of the Director General

In the following weeks and months, committee members ensured that consultation and advice, the newly- Michael Lynn’s name and face, proper decisions, based on the evi- installed President MacGuill gave three together with those of another solici- dence, were taken by the committee. separate speeches, all of which were tor, Thomas Byrne, became notori- The best of legal, forensic account- reported on the front page of The Irish ous, as weekly court applications by ing and public relations advice was Times and widely elsewhere. They the Society revealed more and more retained and relied on by the Society. conveyed the Society’s measured evidence of their dishonesty and mort- The collapse of the Lynn and response. gage fraud, causing losses to financial Byrne practices placed highly Speaking to 70 new solicitors at institutions of amounts estimated to exceptional and wholly unprecedented their parchment ceremony on the be collectively in excess of demands on the Society’s regulation day he took office, on 9 November, “By the time that Society representatives met with the Joint Oireachtas Committee on Justice in Leinster House on 5 March 2008, the effectiveness of the Society’s handling of the issue was being recognised.”

€100 million. In late October, Novem- department. Both Lynn and Byrne MacGuill hit back against false and ber and December 2007, national operated unusually large practices (as damaging reports in the media and news bulletins frequently led with the compared with the size of practices explained that the Society would latest twists in the Lynn and Byrne typically dealt with by the practice clo- not make detailed rebuttals of these stories. What had happened? How sures section) and it is estimated that reports “because it is not prepared had it happened? How many other the total volume of files in both cases to compromise the rights to justice of solicitors might have been engaged combined was equal to at least eight any individual”. However, he took the in such practices? Was the certificate normal practice closures. opportunity to make a strong state- of title system fatally flawed? Would In addition, a huge amount of work ment that “the solicitors’ profession is the Society’s compensation fund be was generated by the requirements founded on core values that protect, wiped out, with resultant levies on all of the Criminal Assets Bureau and not the profession, but the public. The solicitors? Was this all caused by “the the Garda Fraud Squad. Moreover, profession’s dedication to integrity is failure of self-regulation” of solicitors? there was an unprecedented surge in as great today as it has been through- Or was it primarily a product of greed claims. Even excluding invalid claims out our history, and I believe it always and reckless lending by financial from financial institutions that were not will be.” institutions? clients, the valid claims from clients far Later that month, at the Justice By any standards, this was a major exceeded all previous records. All of Media Awards presentation dinner, the crisis for the Society and the profes- this took place against a background president said that “opinion-formers sion. The pressure on the Society was of the pressures produced by daily and other commentators assume intense and unrelenting. It was vital that media scrutiny. that the legal profession supports those in positions of responsibility in Throughout all of this, a remark- self-regulation. We don’t – and won’t the Law Society remained calm, clear able team spirit was maintained – promote self-regulation. As we have thinking, focused and effective in the within the Society. All on the front line pointed out repeatedly, it is fundamen- discharge of their duties. Sensible, sure- displayed great personal dedication, tally misleading to describe the current footed and swift action was essential. professionalism and an appetite for system of regulation of solicitors in All of these necessary professional very hard work. Ireland as ‘self-regulation’.” and personal qualities were displayed The crisis broke in the final three He pointed out that the system of by the Society’s officers and by the weeks of the presidency of Philip regulation operates under statute and is Society’s Regulation Department, led Joyce and continued into the presi- characterised by “all-pervasive external by the director of regulation, John Elliot. dency of James MacGuill. The Society supervision and control by independent In addition, the chairman of the Regula- was fortunate in that both presi- people, including the President of the tion of Practice Committee, John dents are, by nature, calm, sensible, High Court, the Minister for Justice, the O’Connor, and the other hardworking strategic thinkers. Following wide independent adjudicator, and the non- Report of the Director General 13 lawyer nominees of IBEC, ICTU and the course of an hour answering ques- omy into recession for the first time Director of Consumer Affairs”. tions from TDs and senators, the Law in 25 years. The speed with which “These people of integrity and Society representatives were able to the economic slide took place – from standing would not tolerate a system put to rest. an economic growth rate of over 6% that worked other than in the public In May, in the case of Michael to -1% in less than two years – has interest,” he said. Lynn, and in June, Thomas Byrne, shocked everyone. The near total col- the Society succeeded in carrying the lapse of the market for residential and Independence and accountability disciplinary process to completion commercial conveyancing, together On 20 December, speaking alongside with the striking off the roll of the two with the decline in the general level of Minister for Justice Brian Lenihan at a solicitors, coupled with unprecedent- economic activity, has caused a deep parchment ceremony, MacGuill wel- ed fines of €2 million and €1 million decline in the profession’s income, comed the government’s decision to respectively, plus costs. From initial with significant levels of underem- produce draft legislation to introduce investigation of these solicitors to their ployment and unemployment in the a legal services ombudsman, together striking off the roll, these were by far profession as a result. While much of with a non-lawyer majority on the the two speediest strike-off cases in this is the result of global forces Society’s Complaints and Client Rela- the history of the profession. beyond anyone’s control, exemplified tions Committee, to further increase The combined net payments from by the unprecedented crisis in the – in the public interest – the indepen- the Society’s compensation fund in world banking system, the Society is dence, transparency and these two cases to date have been seeking to be of practical assistance accountability of the system. approximately €4 million – a regretta- to the profession at this difficult time. Minister Lenihan in turn welcomed bly large amount, but nothing remotely Among the initiatives taken by the the Society’s support for the agreed of the order of the likely payments that Society in this regard have been the package of legislative reforms. He panicky predictions envisaged when publication on its website of informa- was also pleased that the Law Society the news of the cases first came to tion for members in relation to banking and the Irish Banking Federation had light. The calm and proportionate arrangements. In addition, a direct ap- been engaged in discussions with the response at government level has proach has been made to the Minister view to ensuring the maintenance of a been to continue with measures to for Finance to seek to extend the Irish proper balance between the needs of reform the system of regulation of Deposit Protection Scheme so that, as good conveyancing, mortgage lending solicitors, broadly speaking, in the far as money held in solicitors’ client and banking practice. same way and to the same extent as accounts is concerned, the guarantee By the time that Society represen- had been announced in advance of should be per client rather than per tatives met with the Joint Oireachtas the first discovery of the true nature of account. Committee on Justice in Leinster Michael Lynn’s activities. House on 5 March 2008, the effective- As the focus on this crisis faded, ‘Excellence’ is the watchword ness of the Society’s handling of the the profession’s attention turned to One of the consequences of the eco- issue was being recognised and the another, which, sadly, will be likely to nomic downturn has been the 11% chief concerns expressed by Oireach- stay with the profession for much drop in the numbers commencing the tas members related to the certificate longer, namely the economic down- Professional Practice Course I in Sep- of title system – concerns that, in the turn that has plunged the Irish econ- tember 2008. Education and training,

The meeting of the leaders of the law societies of Ireland, Northern Ireland, Scotland, and England & Wales occurred at

Blackhall Place from 23-24 June 2008. It focused on ‘How law societies can best represent their members’ (Pic: Lensmen) 14 Report of the Director General

profession, the president was also exceptional. A powerhouse of energy and ideas – expressed thoughtfully, and often very amusingly, in an end- less flow of memos – he is passionate about the solicitors’ profession and its fundamental mission in defending democracy and the rights of citizens. Perhaps unexpectedly – for a presi- dent with so many strong, thought-out opinions and such a gift for expressing them – he was always anxious to hear and take into account the views of others. Indeed, wide consultation was one of the characteristics of his leader- ship of the Society this year. Apart from, unprecedentedly, holding two Then Minister for Justice Brian Lenihan and director general Ken Murphy share full meetings in Blackhall Place to brief some thoughts at the 20 December parchment ceremony (Pic: Jason Clarke Photography) and listen to the presidents, secretaries and PROs of all bar associations, he at pre- and post-qualification stages, and second Irish exams. In their place, and I travelled all over the country to will play an important role in helping the Society is now running a more meet with an unusually large number the profession adapt to changes in meaningful Legal Practice Irish Course of bar associations, as well as meeting the market for legal services. As ever, on PPCI and PPCII. A major initiative individually the managing partners of ‘excellence’ is the watchword. has been the release of the Society’s many of the profession’s largest firms. Accordingly, the Society, on its own first completely online diploma. The The views of a very wide range of initiative, commissioned a major exter- first transfer course for barristers individuals outside the profession were nal review of the education and train- seeking to become solicitors also also sought and carefully considered. ing carried out in the Law School. The took place in 2008, and an equivalent In front of 150 or so guests at the review’s primary conclusion was that course was provided by the King’s annual dinner of the Law Society of “the quality of the courses provided Inns for those seeking to transfer in Northern Ireland on 26 September, by the Law School is high. Materials the opposite direction. the president of the Law Society of are of an excellent standard, courses Northern Ireland, Donald Eakin, paid and classes are well structured and Powerhouse of energy an extraordinarily warm tribute to designed, and tutors are provided This annual report, even if read as a James. Acknowledging that he and his with detailed preparation and class whole, records only a fraction of the Southern counterpart were in almost materials.” Nevertheless, a number of valuable work done on behalf of the every respect very different people from significant changes were suggested profession and the public over the very different backgrounds, President by the review, and these have been last year. I have avoided touching on Eakin praised James MacGuill for “his in the process of implementation over almost anything that President James generosity in terms of his time, his the last year. MacGuill mentions in his report. consideration, his commitment and his Other major developments in Although I focused on the high- friendship” before adding, in relation to education in the Society this year profile Lynn and Byrne cases, there the Law Society of Ireland’s challenges included the achievement of secur- were a great many other cases dealt over the past year, “I cannot think of ing very significant funding from the with by the Society this year. Many of anyone who would have been bet- Department of Trade, Enterprise and these also made headlines, as the ter able to deal with them, nor indeed Employment under the Skillnet pro- Society sought to uphold high stan- better able to lead a Society in such gramme. This has enabled the Society dards of conduct by solicitors and turbulent times.” to greatly increase the number of CPD thereby protect both the public and Having had the privilege of working seminars provided outside Dublin and the reputation of the profession. closely with him throughout this truly also to increase the number of skills Those who came in contact in ‘turbulent’ year, nor can I. workshops. any way with James MacGuill recog- The Legal Practitioners (Irish Lan- nised that, in this year of exceptional Ken Murphy, guage) Act 2008 abolished the first challenges for the Society and the Director General REPORTS OF THE DEPARTMENT DIRECTORS

2007/2008 16 Reports of the Department Directors The work of the Society’s committees is coordinated through the Policy, Communication and Member Services Department.

During 2008, a bespoke training programme was provided for all committee chairs, vice-chairs and secretaries. The training programme addressed the issues of setting expectations, upholding standards, and organising for success. Committees were facilitated to set objectives for the year and to become more effective in the use of time and resources in order to deliver agreed results. For 2008/2009, this initiative will be progressed through a training scheme designed around the theme of ‘Working towards excellence in representation’. During 2008, 7,562 solicitor subscribers (84% of the Society’s members) received the Society’s legal e-zine and CPD Focus e-newsletter directly to their desktop, with an impressive 94% ‘open’ rate and an average 85% of recipients reading one or more articles. The hit rate for the website showed a staggering 350% increase on 2007, with 693,874 unique visitors in the 12 months to 1 September 2008. The Society continued to assist the profession with their recruitment needs during the year. In the eight-month period to 31 August 2008, 321 vacancies were advertised on the Society’s free online recruitment register, with 199 being successfully filled through the service. Since its relaunch in 2007, the self-service online locum register has provided access by the profession to over 90 locum solicitors, and the service was accessed by 90 firms in the eight months to the end of August 2008. With a monthly circulation of 12,000, the Gazette provided a further valuable method of recruitment for members, together with a mix of relevant, interesting articles and vital practice information produced in a professional, vibrant manner. The Society’s library continued to provide its comprehensive service to members from an impressive range of legal sources, with an average of 520 requests for materials each month and with many members electing to receive materials in PDF format directly to their desktop. The more traditional methods of library usage remained strong, with 2,721 books borrowed by members in the seven months to 31 July 2008. The Society’s support services for members were enhanced by the introduction of the LawCare service from 1 January 2008. LawCare is a free and confidential advisory service to help lawyers, their immediate families and staff to deal with health issues and related emotional problems such as stress, depression and addiction. In its first six months, the service opened 28 new case files and conducted 93 follow-up telephone calls. In comparative terms, the take-up for the service has been greater in Ireland than in any other jurisdiction. The main issues raised with the service were those of stress and work pressure. The Society’s support services executive and representatives from LawCare are available to attend bar association meetings to outline the services provided by LawCare.

Mary Keane, Deputy Director General Reports of the Department Directors 17 The period under review has been dominated by the cases of Michael Lynn and Thomas Byrne, both of whom were swiftly struck- off the Roll of Solicitors and fined sums of unprecedented magnitude.

In both cases, we are continuing to send out files of the closed practices to clients’ new solicitors when requested. We continue to receive applications from banks for production of documents. Where there are disputed priorities, application must be made by the banks to the High Court. We continue to cooperate with the Criminal Assets Bureau and the Fraud Squad. We are processing claims on the compensation fund, which are being dealt with in accordance with the terms of the statutory scheme. It is still too early to estimate the total amount of such claims that will be granted. The sheer scale of the administrative operation to close the Lynn and Byrne practices presented a challenge to the department’s Practice Closures Section on a wholly unprecedented level. We have seen a substantial increase in the number of freezing orders applied for. Such cases are always urgent and time-consuming, and the trend has placed significant additional pressure on the Regulation Department. There has also been a notable increase in the number of complaints about breaches of solicitors’ undertakings, which are dealt with by the department’s Complaints and Client Relations Section. This can be directly attributed to an increased focus on undertakings by financial institutions. The implementation of the new professional indemnity insurance regulations has proceeded smoothly. It should be of considerable assurance to clients and the profession that situations are being prevented by the new regulations in which clients previously did not have the protection of insurance cover.

John Elliot, Registrar of Solicitors and Director of Regulation 18 Reports of the Department Directors The year under review has been a busy one. Numbers on the student courses fell slightly this year (albeit by just one student) – the first such fall since 2001. However, numbers attending post-qualification education activities have increased significantly.

The year has seen major changes for the Professional Practice Courses. A new subject has been introduced to the course – legal skills (covering advocacy, negotiations, general presentation skills, interviewing, legal research and drafting). These skills had been taught in the past, but will now be given considerably more teaching time and will be assessed. There has been major investment in video cameras and IT resources to allow students to be recorded and have their on-camera performance reviewed. In addition, there will be an increased focus on client care. There have also been revisions to the PPCII. The Cork courses continue to thrive, with 106 students completing their PPCI in Cork last year and 80 students their PPCII. A notable achievement was that of Cork students Val Moran and Anthony Murphy, who came third in the International Negotiations Competition in London. There has been a huge growth in post-qualification education over the last year. The number of diplomas offered has more than doubled, and over 700 solicitors from all over Ireland have attended these courses. New courses on offer this year were the Diplomas in Family Law and Commercial Litigation as well as the Cork-based Certificate in Applied Conveyancing. A number of online courses will be provided during the coming year, most notably the Diploma in Employment Law. CPD continues to be a major part of the Law Society’s educational activities. The CPD programme has grown considerably, and new IT, legal skills and management courses have been provided. Seminars have been run in a number of new venues throughout Ireland. The securing of grant funding from Skillnets has enabled us to provide a range of training that would not otherwise be feasible. It has also enabled us to offer CPD training at a discount to those firms who signed up as members of the Skillnet.

TP Kennedy, Director of Education Reports of the Department Directors 19 The department’s job is to provide infrastructure and support to the departments providing the core business functions of regulation, education and representation, as well as a myriad of services to ‘external’ clients.

The external services include Four Courts consultation room hire, the company formation service, publications sales, premises hire and catering and bar services – all of which are important commercial activities and account for approximately 10% of total turnover. On the internal side, the department’s main activities are finance, IT, premises/facilities and internal services such as printing, post, telephone, reception, cleaning, security and maintenance. With turnover in excess of €27 million (split almost 50/50 between general activities and education activities), the finance function is a key element in ensuring that we receive value for money from both operational and capital expenditure. As well as this, the finance section undertakes various projects and, in 2007/2008, these included a review of the Society’s staff pension scheme, which resulted in a change of investment strategy and investment manager, an updating of the Society’s five-year financial plan, a review of investments and a fraud- risk review. As ‘risk manager’ for the Society, the department is responsible for the general and professional indemnity insurances, for maintaining a risk register of Society activities, and for ongoing business continuity planning. The department is also responsible for the Society’s eco-friendly programme. On the facilities side, as well as ongoing business driven by diverse uses of Blackhall Place, a building management system has been implemented to ensure the efficient and economical operation of the Blackhall building. The facilities section also manages the rental of four properties housing Law Society activities. A feasibility study of the potential uses of the Benburb Street site is almost completed. On the commercial side, 2007/2008 has been challenging for the important member services managed by the department. These include 26 consultation rooms in the Four Courts, the company formation service (which forms over 900 companies per annum), publications sales (including Requisitions on Title and Conditions of Sale), premises hire and catering services in Blackhall Place. The surplus that is generated from these activities makes a significant contribution to keeping down the cost of the annual practising certificate. The department is constantly called upon to undertake a myriad of tasks, planned and unplanned. These are undertaken efficiently and willingly, thanks to the hard work of all staff in the department.

Cillian MacDomhnaill, Director of Finance and Administration FACTS ABOUT THE PROFESSION

2007/2008 Facts about the Profession 21 For your information…

GenderGender profile: profile: members members Gender profile: practising solicitorsGender profile: practising solicitors Gender profile: members Gender profile: practising solicitors

Female: 4,252 (47%) Female: 3,727 (46%)

Male: 4,751 (53%) Male: 4,302 (54%)

Female: 4,252 (47%) Female: 3,727 (46%) Female: 4,252 (47%) Female: 3,727 (46%) Male: 4,751 (53%) Male: 4,302 (54%) Male: 4,751 (53%) Male: 4,302 (54%)

Practice status Law firm profile

5 partners: 22

Not practising: 770 Sole practitioners: 991 6 partners: 15

7 partners: 6 Abroad: 28 Sole principal:Gender 570 profile: members Gender profile: practising solicitors Practice status State: 277 2 partners:Law 428 firm 8 partners:profile 4 Practice status Corporate: 702 Law firm3 partners: profile 123 9 partners: 4 Practice status Law firms: 7,226 Law firm4 partners: profile 57 10+ partners: 19

Age profile: Practising solicitors

5 partners: 22 3000 Female: 4,252 (47%) 5 partners: 22 Female: 3,727 (46%) Not practising: 770 SoleMale: practitioners: 4,751 (53%) 991 6 partners: 15 Male: 4,302 (54%) Not practising: 770 Sole practitioners: 991 6 partners: 15 2500 Abroad: 28 Sole principal: 570 7 partners: 6 Abroad: 28 Sole principal: 570 7 partners: 6 State: 277 2 partners: 428 8 partners: 4 2000 State: 277 2 partners: 428 8 partners: 4 Corporate: 702 3 partners: 123 9 partners: 4 Corporate: 702 3 partners: 123 9 partners: 4 Law firms: 7,226 4 partners: 57 10+ partners: 19 1500 Law firms: 7,226 4 partners: 57 10+ partners: 19

1000 Practice status Law firm profile Age profile: Practising solicitors 500Age profile: Practising solicitors

5 partners: 22 30000 Not practising: 770 Sole practitioners: 991 6 partners: 15 3000 20-29 30-39 40-49 50-59 60-69 70-79 80-89 90-99 n/a Abroad: 28 Sole principal: 570 7 partners: 6

State: 277 2 partners: 428 8 partners: 4 Age2500 profile: members Age profile: practisingCorporate: 702solicitors 3 partners: 123 9 partners: 4 2500 Law firms: 7,226 4 partners: 57 10+ partners: 19 Age profile: members 2000 35002000 Age profile: Practising solicitors

3000 3000 1500 2500 2500 1000 2000 2000

1500500 1500

1000 1000 0 0 20-29 30-39 40-49 50-59 60-69 70-79 80-89 90-99 n/a 500 20-29 30-39 40-49 50-59 60-69 70-79 80-89 90-99 n/a 500

0 0 20-29 30-39 40-49 50-59 60-69 70-79 80-89 90-99 n/a 20-29 30-39 40-49 50-59 60-69 70-79 80-89 90-99 n/a

Age profile: members

Age profile: members 3500 3500

3000 3000

2500 2500 2000 2000 1500

1500 1000

500 1000 0 20-29 30-39 40-49 50-59 60-69 70-79 80-89 90-99 n/a 500

0 20-29 30-39 40-49 50-59 60-69 70-79 80-89 90-99 n/a 20-29 30-39 40-49 50-59 60-69 70-79 80-89 90-99 n/a REPORTS OF THE LAW SOCIETY COMMITTEES

2007/2008 Reports of the Law Society’s Standing Committees 23 Law Society committees

The Society’s committees are appointed by the Council from the November Council meeting in each year until the November Council meeting of the following year. The incoming president selects the chairman and members of each committee and places their names before the Council for approval. The Council regulations distinguish the committees into two categories: ‘standing committees’ (in the bye-laws, com- mittees of the Council) and ‘non-standing committees’ (in the bye-laws, committees of the Society). In addition, various subcommittees, task forces and working groups are established to deal with various matters, legislative and operational, as they arise.

Standing committees

The Solicitors Acts provide that the functions of the Society set out in the acts (that is, the statutory func- tions) are exercisable by the Council, and further provide that the Council may delegate the exercise of any functions of the Council to a committee established for that purpose. As a result of this power, the Council appoints what are known as ‘standing committees’, which exercise statutory functions on behalf of the Council.

Complaints and Client Relations Committee

The committee, which is split into two divisions, met 17 times this year, including two plenary sessions to consider policy issues. The number of complaints investigated (1,745) has increased, and consequently the committee’s workload has increased commensurately. The most significant feature of the statistical review of the complaints made to the Society in the last 12 months is the increase in the number of complaints concerning undertakings. Although most of these complaints were ultimately resolved, nonetheless the investigation of these complaints suggests that some solicitors do not fully understand the significance of an undertaking and the extent of the obligations imposed on a solicitor who gives an undertaking. At the time of writing, the Civil Law (Miscellaneous Provisions) Act has John P Shaw just been passed, and this heralds the introduction of a lay majority on any committee dealing with complaints about inadequate legal services and excessive fees. The operative section will come into force on 1 January 2009. The act also provides that the Society may make limited awards of compensation (up to a ceiling of €3,000) to clients who have suffered any financial or other loss because of the inadequacy of the services provided to them. The Legal Services Ombudsman Bill, which provides for the establishment of the Office of the Legal Services Ombudsman, is still pending. My thanks to my vice-chairman and members of the committee who, together with the solicitors and staff in the Complaints Section, have carried out and supported the work of the committee with dedication and commitment throughout the year.

John P Shaw, chairman 24 Reports of the Law Society’s Standing Committees

Coordination Committee

The Coordination Committee operates as the oversight committee for the projects undertaken by each of the Society’s committees. It reviews the benefits of these projects in terms of resources and delivery and allocates finances within an overall budget determined by the Finance Committee. It considers requests to pursue specific proposals or seek expert advice during the course of the year and ensures that the direction and priority of projects are appropriate to the Society’s overall objectives. The committee also acts as a link between the committees and the Council and provides a useful forum for the resolution of operational and procedural matters. During 2007/2008, the committee held two all-day meetings with the chairmen of the Society’s standing committees to discuss strategic issues James MacGuill facing the Society and the profession, both in the short and long-term. In addition to its own monthly meetings, the committee held a series of special meetings to consider feedback from the profession arising from the president and director general’s meetings with bar associations, the large firms and more-recently qualified solicitors (the ‘21st century solicitors’). During the past year, the committee coordinated the Society’s position on a number of key issues, including the relocation of the Society’s Regulation Department, a number of proposed amendments to the Solicitors Acts and a comparative review of models of regulation and representation internationally. In addition, it provides a ‘sweeper’ function for issues falling outside the remit of the other committees, with examples including the notices issued to solicitors’ firms from the Irish Copyright Licensing Agency, a request for funding from BAILII, correspondence with the Department of Justice on issues relating to elder abuse, the Society’s participation in an OECD study, requests for appointments to other bodies and requests for membership of Society committees.

James MacGuill, chairman

Education Committee

The work of the Education Committee continues to increase, and while student numbers remain high at 671, the numbers of those seeking to gain entry to the profession seems to be levelling off for the first time in a number of years. A major review of education and training was concluded late in 2007. Following on from this, a number of important changes were made. PPCII was shortened in duration from 16 to 11 weeks. The amount of legal skills that will be taught in the September PPCI will increase threefold. More fundamentally, the committee will be considering recommendations of the review group in relation to in-office training over the coming months. This year has also seen the abolition of the first and second Irish examinations by the Legal Practitioners (Irish Language) Act 2008. To meet James O’Sullivan the new requirements of the act, a legal practice Irish course was provided on PPCII and will run on PPCI for the future. This course focuses on the spoken language and combines some practical instruction to students. The law school in Cork continues to thrive, with 106 students completing their PPCI course there last year and 80 students their PPCII. This year has seen the first transfer course for barristers. Barristers and solicitors of three or more years’ standing can now take a four-week course to transfer to the other profession. The first such course run by the Law Society commenced on 5 August and was attended by 19 barristers. Reports of the Law Society’s Standing Committees 25

The diploma programme continues to grow and has increased from five in 2006/07 to 11 in 2007/08. During the last year, CPD seminars have been brought to a large number of regional venues. Very significant funding was obtained from the Department of Enterprise for CPD under the Skillnets programme. Finally, a sincere word of thanks to my committee colleagues and special words of thanks to TP Kennedy, Geoffrey Shannon, Paula Sheedy, Fionna Fox and Attracta O’Regan for all of their help and assistance. Additionally, to the hardworking staff in the Education Centre, without whom we could not function.

James O’Sullivan, chairman

Finance Committee

The outcome for the Society’s ‘group’ for the year was a surplus after taxation of €4,041k (2006: €3,286k). This figure includes amounts allocated to the Education Centre Fund and the Property Fund. Most of the year-on-year improvement came from education, which experienced above-budget income and significant cost savings. The after-tax financial outcome for the Society’s core operations, that is, general activities (representation and regulation) and education activities, was €1,066k (2007: €915k), which represents an overall surplus of 4.8% on operating income. General activities incurred an unbudgeted pretax deficit of €144k, arising from some significant unbudgeted expenditures, including provisions for legal fees and costs associated with the PR campaign. Gerard Doherty The grouping of accounts can distort the view of individual operations and the table below shows the management accounts and adjusted audited outcome for each of the group’s entities.

Entity Management accounts Audited statements

General activities -144,3671 41,104 Funds 3,035,537 3,035,537 Education activities 1,487,962 2,091,737 Law Club of Ireland -13,638 Benburb Street Property Co Ltd -76,000 Friary Property Services Ltd 12,325 -849,353 Ellis Quay Property Services Ltd 17,201 Group taxation 277,525 -277,525

Total 4,041,495 4,041,495

Our income streams Total income rose by 11% to €26,300k (2006: €23,600k). Fees and subscription income increased by 12%, education income by 14% and income from other sources grew by 2%. Commercial activities and interest performed well, despite a marked slowdown in the second part of 2007, generating an income of €2,055k (2006: €2,115k). It is significant that education income, at €12,421k, now significantly exceeds fees and subscription (€10,892k) as the main source of income. This can be broadly analysed as €8m from professional practice course fees, €2m from exam fees and indentures, and €2m from PQE seminars and diplomas. Student intake for PPCI courses was 660 (2006: 667). Diploma courses and CPD income grew by 44%, to €2,228k. 26 Reports of the Law Society’s Standing Committees

Admissions and Courses 2007 IncomeIncome 2007 Sources 2007

800 700 15,000,000 600 12,000,000 500

400 9,000,000 8,013,877 7,021,164 300 200 6,000,000 2,245,684 2,212,383 12,421,317 10,938,338 100 2,878,139 2,730,636 2007 3,000,000 0 2006 2007 Admissions PPC1 PPC2 0 2006 Fees & subs Funds Services Education & interest

Practising certificate fee income increased by €925k. In 2007, there were Surplus 2007 7,876 (2006: 7,416) practising certificate holders, an increase of 460. There were 8,684 members (2006: 8,188), an increase ofPraticing 496. There Cert wereHolders 642 & Members 2007 3,500,000 admissions to the roll in 2007. 10000 3,000,000 Net income to the Education Centre Fund and the Property Fund for 2007 2,500,000 was €3,064k (2006: €2,780k). 8000

2,000,000 777,555 1,487,962 Our expenditure 6000 1,500,000 Overall expenditure rose to €21,983k (2006: €20,169k). On the general

1,000,000 312,131 -144,367 3,035,537 2,577,147 activities side, operating charges grew by4000 €1,402k. Significant increases 2007 500,000 occurred in legal fees, arising from the defence of judicial review actions 2006 Income Sources 2007 0 inAdmissions relation to and the Courses Society’s 2007 regulatory functions,2000 PR costs, and in general PC Holders -500,000 regulatory costs, which cover the Solicitors Disciplinary Tribunal, the General Funds Education800 0 Members Independent Adjudicator and complaints processing. Education activities 700 2003 15,000,0002004 2005 2006 2007 operating charges increased by only €527k, reflecting significant economies 600 arising from the restructuring of the professional practice courses. 12,000,000 500

400 Our balance sheet 9,000,000 8,013,877 7,021,164 300 The balance sheet remained strong, with net assets of €27,502k, an increase 200 of €4,041k from 2006. 6,000,000 The balance sheet reserves include two contingency funds for capital 2,245,684 2,212,383 12,421,317 10,938,338 100 2,878,139 2,730,636 expenditure and litigation, which act as a reserve2007 to meet costs3,000,000 in these areas as 0 2006 2007 Admissionsthey arise. There PPC1are also two ‘sinking’PPC2 funds, the Education Centre Fund to buy 0 2006 back the Education Centre in 2014 under a sale and leaseback arrangementFees & andsubs Funds Services Education a Property Fund to pay for the Benburb Street site over a ten-year period. & interest

Surplus 2007 Surplus 2007 Praticing Cert Holders & Members 2007 3,500,000 10000 3,000,000 2,500,000 8000

2,000,000 777,555 1,487,962 6000 1,500,000

1,000,000 312,131 -144,367 3,035,537 2,577,147 4000 500,000 2007 0 2006 2000 PC Holders -500,000 General Funds Education 0 Members 2003 2004 2005 2006 2007 Reports of the Law Society’s Standing Committees 27

Areas of expenditure 2007 (%)

Payroll costs: 29% Regulation: 14% Member services: 13% Subsidiaries: 13% Services: 12% Administration: 11% Premises: 5% Financing costs: 3% Direct Education: 0% Areas of expenditure 2007 (%)

Payroll costs: 29% The drawdown amount on the Benburb StreetRegulation: site 14% mortgage at the end of 2007 was €3.1m (2006: €6.8m) and the interest cost for the year was €29k Member services: 13% (2006: €203k). Subsidiaries: 13% Services: 12% Our subsidiaries and€ related undertakings Reserves 2007 ( m) Administration: 11% The group structure includes a number of subsidiary entities that are effectively Premises: 5% run on a break-even basis. The Law Club ofLaw Ireland Society: operates 11.3m the commercial Financing costs: 3% elements of the Blackhall Place premises andEdu made Centre aFund: loss 7.2m of €14k. Benburb Street Property Company Ltd, which owns PrandDiropertyect manages Education: Fund: 3.0m 0%the Benburb Street Capital Ex Fund: 2.4m site, made a loss of €76k. Friary Property Services Ltd, which rents and Law School: 1.8m manages the Disciplinary Tribunal offices, made a surplus of €12k and the Ellis Litigation Fund: 1.7m Quay Property Services Ltd, which rents and manages the CPD offices and Law School facilities in Cork, made a surplus of €9k.

Reserves 2007 (€m)

Law Society: 11.3m Edu Centre Fund: 7.2m Property Fund: 3.0m Capital Ex Fund: 2.4m Law School: 1.8m Litigation Fund: 1.7m

2008 Despite significant economic uncertainty, the financial performance of the Society for 2008 will essentially be on budget, but there will be slight shortfalls in practising certificate income, education income and income from commercial activities. The Finance Committee is conscious of the impact of this downturn on the profession and is committed to working to keep the practising certificate cost for practitioners to a minimum, despite ever-increasing costs, particularly on the regulation side. The committee continues its stewardship to ensure value for money for all operational and project spending, and that the Law Society continues to serve its members in the most effective manner.

Gerard Doherty, chairman 28 Reports of the Law Society’s Standing Committees

Money-Laundering Reporting Committee

Under section 57(2) of the Criminal Justice Act 1994, as substituted by section 36 of the Criminal Justice (Terrorist Offences) Act 2005, where the Law Society suspects that a money-laundering offence or an offence of financing terrorism has been or is being committed by a practising solicitor, the Law Society is obliged by law to report that suspicion to the Garda Síochána and the Revenue Commissioners. The fulfilment of this obligation has been delegated to the Money- Laundering Reporting Committee. The committee reports to the Council of the Law Society on the making of reports under section 57(2) on a ‘no-names’ basis. The existence of the offence often referred to as ‘tipping-off’ means that the Law Society must ensure the highest standard of confidentiality in Simon Murphy administering its money-laundering reporting procedure. The Law Society’s reporting obligations are separate from the obligations of solicitors to report suspicions to the authorities pursuant to section 57(1) of the 1994 act.

Simon Murphy, chairman

Professional Indemnity Insurance Committee

The new Professional Indemnity Insurance Regulation Scheme came into force on 1 November 2007, and many new issues arose during the year requiring the committee’s input. The committee will continue to monitor how the new regulations are working out in practice. One issue that is of concern is that of ‘succeeding practices’. Practitioners need to read the regulations very carefully with merging or taking over files from another office. Without advance planning, a firm could end up being deemed a succeeding practice unknowingly, and this could have unintended implications for its insurance cover. The committee was glad to note that only a very small number of firms failed to renew their professional indemnity insurance in time. It seems that Niall Farrell the profession appreciated the importance of doing this and not becoming a defaulting firm. When a firm becomes a defaulting firm, the assigned risks pool will cover its liabilities but the solicitors will be personally responsible to reimburse the assigned risks pool for any claims made. We are heartened to see that there is still healthy competition in the market and that premia have not increased significantly. The committee appreciates the central role being played by the Solicitors’ Mutual Defence Fund Limited and their cooperation with the committee in assisting with the administration of the assigned risks pool. As ever, I am very appreciative of the efforts of Rosemary Fallon and her tireless work in professional indemnity insurance matters. I would also like to thank Dan O’Connor, my vice-chairman, and the other committee members who have volunteered their time during the year to assist the profession and their colleagues.

Niall Farrell, chairman Reports of the Law Society Standing Committees 29

Regulation of Practice Committee

The Regulation of Practice Committee administers the compensation fund, which the Society is required to maintain in order to compensate clients for losses arising due to dishonesty on the part of solicitors or their employees. The committee also polices the profession’s compliance with the Solicitors’ Accounts Regulations and with aspects of the Solicitors Acts not assigned to other regulatory committees.

Audited accounts The income and expenditure account of the compensation fund reflects a deficit (representing an excess of expenditure over income after taxation) of €2,944,736 for the year ended 31 December 2007, as compared with a deficit of €400,771 for the year ended 31 December 2006. The increase of John O’Connor €2,543,965 in the deficit for 2007 as compared with 2006 is attributable to a decrease in 2007 of €319,697 in income, an increase of €2,244,024 in expenditure, as compared with 2006, together with a decrease in taxation amounting to €19,756. The decrease of €319,697 in income in 2007 is attributed mainly to a decrease of €894,948 in recoveries from defaulting solicitors. Practising certificate income increased by €188,401. A legal action against a financial institution was successfully completed and a settlement of €300,000 received. The increase of €2,244,024 in expenditure as between the two years is substantially attributable to an increase in the provision for claims of €2,034,338. Practice closure expenses increased by €102,916. As referred to above, there was a decrease of €19,756 in the charge for taxation in 2007 as compared with the charge for 2006. The fund is liable to income tax on investment income and gains. The net assets of the fund as at 31 December 2007 stood at €27,588,029, compared with €34,474,970 as at 31 December 2006. The decrease of €6,886,941 in the net asset position of the fund as between the two years’ end is reflected in a decrease of €2,944,736 in revenue reserves together with a decrease of €3,942,205 in the revaluation reserve on the fund’s investments. The preponderance of the fund’s assets are invested in publicly quoted stocks, shares, and government securities. These investments are recognised in the accounts at prevailing market valuations at year’s end. As at 31 December 2007, the net assets of the fund, which were valued at €27,588,029, were financed by accumulated revenue reserves of €22,474,681 and unrealised surplus on investments held at the balance sheet date amounting to €5,113,348.

Developments since December 2007 In the seven months ending 31 July 2008, 420 claims were received. Excluding invalid claims refused, these claims amounted to €13,436,317. Payments were made in the sum of €7,458,943 in respect of claims, and claims amounting to €5,977,374 are still under consideration. The net assets of the fund are valued at €15 million as at 31 July 2008. The annual contribution to the fund remained at €400 per solicitor for 2008. Insurance cover for €30 million in excess of €5 million is in place for the year ending 31 December 2008. The Society will be seeking to recover under the insurance policy. The Society is confident that it will make substantial recoveries. The committee met on 26 occasions, for eight scheduled, 12 special and six emergency meetings. In the course of the year, the Society’s investigating accountants conducted approximately 300 investigations of practices. 30 Reports of the Law Society’s Standing Committees

Additionally, the secretariat dealt with a very high level of claims on the compensation fund (415 compared with 216 in the previous year). During the year the committee decided to: • Refer 17 solicitors to the Solicitors Disciplinary Tribunal on foot of findings disclosed in the investigation reports on their practices, • Refer six solicitors to the Disciplinary Tribunal for failure to file accountants’ reports on time, • Apply to the High Court for an order freezing the accounts of nine solicitors where dishonesty was discovered, • Suspend the practising certificates of five solicitors, • Levy contributions amounting to €144,000 towards the costs of investigations, • Refer a firm of reporting accountants to its professional body, and • Make applications pursuant to section 18 of the Solicitors (Amendment) Act 2002 in two cases where solicitors failed to comply with Society directions.

The paramount concern of the committee at all times is the protection of the public interest and the maintenance of the good reputation of the profession as a whole and, when necessary, this requires the Society to pursue matters of serious concern in the High Court. It is unfortunate, but unavoidable, that the fulfilment of this duty has recently necessitated an unprecedented level of activity on the part of the Society in the High Court, including a significant increase in the number of applications for freezing orders. The Society has submitted that these cases should be heard in public rather than in camera, as the Society believes that it is very important for the public and the profession to know which solicitors are before the court and why they are before the court. I believe that we have the most transparent professional regulatory system of any profession in Ireland, of which the Society and the profession should justly feel proud. While certain cases, especially those of Michael Lynn and Thomas Byrne, have attracted considerable media attention, it is important to recognise that these cases are completely unrepresentative of the everyday business of regulation, whereby the Society works day in and day out to protect clients’ interests and to encourage improved standards. The committee decided to appeal to the Supreme Court the judgment of the High Court as to the appropriate sanction in the disciplinary case against Colm Carroll and Henry Colley, due to the view of the committee that the sanction imposed by the High Court was inadequate in the circumstances of the case. To meet the increasing demands on the regulatory function, our investigation team has been strengthened by the recruitment of two additional investigating accountants and a dedicated specialist claims administrator to handle claims on the compensation fund. I would like to extend my sincere thanks to the committee vice-chairman, Michael Quinlan, and to the other members of the committee for their much- appreciated participation throughout the year. I would like to pay particular thanks to the lay observers, Frank Bowen and Cecil Donovan, whose contribution has been of great assistance to the committee. I would also like to thank the Registrar of Solicitors and Director of Regulation, John Elliot, and his team in the Regulation Department for all their hard work.

John O’Connor, chairman Reports of the Law Society’s Non-Standing Committees 31 Non-standing committees

Non-standing committees are appointed by the Law Society’s Council where the Council believes the work of the Society may be better effected by such a committee. They do not perform statutory functions.

Arbitration and Mediation Committee

The work of the Arbitration and Mediation Committee reflects the changes in day-to-day practice that many practitioners are experiencing. Some delays in the court system, the unpopularity of litigation, and some public examples of people finding a resolution for their disputes through compromise are all factors that have contributed to a growth of interest in methods of dispute resolution other than litigation. The Law Society was a patron of the International Council for Commercial Arbitration conference, which took place at Croke Park from 8-10 June 2008. The conference brought international arbitration practitioners from around the world to Dublin for the first time. The biannual conference was a resounding success, and it enabled Ireland and the Law Society to showcase some of our leading practitioners in this area. Members of the committee were instrumental Joseph Kelly in planning and organising the conference and working closely with colleagues from the Bar Council in ensuring that everything went smoothly. Follow-up ac- tion, in terms of generating more work in this area, is being pursued with other stakeholders active in domestic and international arbitration. A new Arbitration Bill has been published, coinciding with the ICCA confer- ence. A subcommittee has been meeting to discuss the bill and its implications for solicitors in dealing with domestic and international arbitrations. This year also witnessed the publication of a very detailed and considered report on alternative dispute resolution, to which members of the committee made a contribution, duly acknowledged by the LRC. A reading of the report provides a good update on where Ireland currently stands in this area and the possibilities for solicitors in developing their practice in this area. The commit- tee continues to be involved with the LRC in promoting legislation where it is needed. It has been a very busy year for the committee. Special thanks to each and every member of the committee for the sterling work done throughout the year. Without the wholehearted enthusiasm and support of Colleen Farrell, the com- mittee’s secretary, it would not have been possible to move forward on each of the different areas, and for that I want to especially thank her.

Joseph Kelly, chairman 32 Reports of the Law Society’s Non-Standing Committees

Business Law Committee

Among its principal activities during the year, the committee was involved in a major review of the operation and implementation of the Competition Act 2002, on which the committee made a detailed submission. In relation to practice issues, the committee has: • Engaged with one of the major financial institutions on the form of opinions that practitioners are expected to give in certain commercial transactions, • Been in regular contact with the Companies Registration Office on matters of interest to members of the profession, and • Made representations to the Irish Banking Federation concerning certain indemnities incorporated into the terms and conditions of several banks.

Mark Ryan In anticipation of the publication of the Companies Consolidation and Reform Bill, the committee regularly makes proposals to the Company Law Review Group for changes in the law. At EU level, there are significant initiatives being proposed towards the re- form of contract law and towards a simplified business environment in the areas of company law, accounting and auditing – among them, the proposal for a European private company. The committee is actively involved in reviewing and making proposals on these initiatives. I would like to express my sincere thanks to the committee’s vice-chairman, John Olden, its secretary, Joanne Wright, and all other members of the committee for their contribution to the work undertaken by the committee during the year.

Mark Ryan, chairman

Conveyancing Committee

The committee works to assist the profession in matters of conveyancing prac- tice and procedure and to offer a guide as to best practice. This year, it has had numerous meetings with the IBF to agree a revision of the certificate of title system for residential mortgage lending. It is hoped that agreement will be reached shortly on the changes needed to improve the op- eration of the system for both solicitors and lenders. The committee has published 12 practice notes in the Gazette and four articles in the Society’s e-zine during the year. Colleagues regularly look for guid- ance on practical issues that arise, and queries are dealt with at our monthly meetings. Numerous queries are also dealt with by the conveyancing helpline, operated by the committee secretary, which received 859 calls during the year. Barry MacCarthy The committee recently issued guidelines to members on building energy rating certificates and on advising clients on equity release schemes. A subcommittee consisting of members from the Conveyancing and Taxa- tion Committees has produced and issued a new VAT special condition for the contract for sale and are currently working on new VAT requisitions and a prec- edent VAT clause for leases. The committee has continued to keep its standard documents under review. The committee made a formal submission to the Law Reform Commission on multi-unit developments and had a follow-up meeting with the Department of Justice. It also had a number of meetings with the Property Registration Author- ity and the Department of Justice to discuss the new Registry of Deeds rules and proposed changes to the Land Registry rules.

Barry MacCarthy, chairman Reports of the Law Society’s Non-Standing Committees 33

Corporate and Public Sector Committee

The committee continued to strive to represent the views and promote the interests of in-house solicitors. The committee welcomed a number of new members. Arising from its agenda, the committee particularly focused on the following: • Hosting a board meeting of the European Companies Lawyers Association (ECLA) in Blackhall Place on 16 November 2007 and representing the Law Society at the ECLA board meetings held in Manchester on 11 April 2008. The committee continues to liaise with ECLA and with the Corporate and Public Lawyers Association (CPLA), with a number of committee members also being members of the CPLA. • Seeking to build upon the relationship between the Law Society and its in- house members through an updated committee’s section of the Law Society Edward Hughes website, articles in the Gazette, and a letter issued in September 2008 to the 824 Law Society members working in-house, updating them on the work of the committee. • Organising a seminar, in conjunction with the Society’s CPD Focus team, tailored for in-house solicitors, to be held on 27 November 2008 in Black- hall Place, entitled ‘Value and Values: a Management Seminar for In-House Solicitors’. • Updating the Law Society’s information booklet designed to assist solici- tors commencing employment in the corporate and public services sectors, which the committee aims to complete this year.

I would like to thank all the committee members for their hard work this year, with special thanks to Andrew O’Flanagan, vice-chairman, and our secretary, Louise Campbell.

Edward Hughes, chairman

Society launches eVision report

E-conveyancing envisages a paperless process for property transactions. It involves placing the complete conveyancing system on an electronic platform. The Society has been engaged, with the Law Reform Commis- sion and other agencies, in developing an e-conveyancing strategy and vision and established a task force in 2005 to progress this mandate. In July 2008, the Society’s eConveyancing Task Force launched a report entitled eConveyancing: Back to Basic Principles – Vision of an Electronic System of Conveyancing (‘eVision’). This is intended to provide a frame- work for discussion and stimulate other stakeholders in the conveyanc- ing process. It will encourage them to examine their procedures and involvement in the current conveyancing process and thus initiate the changes required to facilitate e-conveyancing. It is hoped that this vision will provide a workable model for e-conveyancing in Ireland.

At the eVision launch on 22 July 2008 were (l to r): Neil Butler, Deirdre Fox, Majella Egan, Tom O’Malley, Dan O’Connor, Eamonn Keenan and Gabriel Brennan (Pic: Lensmen) 34 Reports of the Law Society’s Non-Standing Committees

Criminal Law Committee

A major feature of the year has been the growing disquiet within the profes- sion regarding the deficiencies of, and anomalies within, the Criminal Legal Aid Scheme. The issues arising were addressed by the committee in robust discussions with the Department of Justice, Equality and Law Reform, which are continuing. Committee members participated in a number of seminars relating to the practical application and impact of the raft of criminal law legislation introduced in recent times and also contributed Gazette articles on a variety of issues of interest to criminal law practitioners. Committee members have represented the Society on eight court users’ groups, one special project group, and on the government-established Com- Dara Robinson mittee on Codification of the Criminal Law. The committee’s participation in the planning of the pilot scheme for video consultations with clients in Cloverhill Prison came to fruition with the launch of the pilot scheme in April. The commit- tee also initiated discussions with all relevant parties regarding the streamlining of consultations and the listing of cases in the Cloverhill High Court bail list, which is under continuing review. As part of its legislation-monitoring process, committee members presented briefings on a number of bills and heads of bill. A detailed submission was also made to the DPP in relation to the DPP’s ‘Reasons Project’. Numerous other issues appeared on the committee’s agenda over the year and I am very grateful to each member of the committee for their sustained interest in the work of the committee on behalf of the profession and for their valued support.

Dara Robinson, chairman

Curriculum Development Unit

The continued importance the Law Society places on curriculum development was reflected in the increase in the size of the unit by the addition of two new members this year. The unit continued the work carried on under the chairmanship of Dominic Dowling last year by continuing to place emphasis on the inculcation of skills in the Law School. The Skills Task Force, under the chairmanship of Colette Reid, started work in January 2008 and has already completed phase one of the project. A new skills core subject will be introduced for the 2008 PPCI. Aside from a particular emphasis on civil advocacy, trainee solicitors will be guided on professional development, legal research, legal writing and drafting, legal presentation skills, Colm Costello interviewing and advising, and negotiation skills. Of course, there is already an element of skills training in the core subject areas, and this new core subject will be integrated with existing training within those courses. As solicitors will only be too painfully aware, the behaviour and unacceptable practice of a small number have come under particular scrutiny this year. There- fore, I am pleased to note the particular emphasis being placed on the teaching of ethics to trainee solicitors, under the guidance of Eva Massa. Such training includes an examination of the students’ appreciation of the key ethical de- mands placed on a practising solicitor, much to the surprise of some students, who may have thought that there was no possibility of failing such an examina- tion. Reports of the Law Society’s Non-Standing Committees 35

Civil legal aid booklet an ‘invaluable resource’, says minister

On 5 September, the Minister for Social and Family Affairs, Mary Hanafin, launched the Legal Aid Task Force booklet. The booklet, Civil Legal Aid in Ireland: Information for the Profession, conveniently brings together practical details about existing civil legal aid schemes in Ireland, so that those entitled to the benefit of such schemes can avail of them. This is the first time that all of this information has been brought together in a single publication. The information will be of interest to members of the legal profession, community activists, NGOs and members of the public. The booklet is available on the Law Society website (www.lawsociety.ie) and through the Legal Aid Board. The booklet was hailed as an “invaluable resource” by the minister and was welcomed by various organisations, including FLAC, which said the publication was an “important step in raising awareness The Minister for Social and Family Affairs, Mary Hanafin, at of people’s entitlements”. The chair of the Legal Aid Board, Anne Colley, the launch of Civil Legal Aid in Ireland: Information for the Profession at Blackhall Place on 5 September 2008 (Pic: Lensmen) also welcomed the booklet as another means of widening the awareness and appreciation of the work that the board is engaged in.

I am also pleased to report that significant progress has been made in in-office training. Under Fionna Fox, an ‘Online Training Service’ offers online support services to trainees and also helps ensure that they satisfy all of the requirements arising under the indenture deed. The curriculum development unit was very kindly welcomed to the Belfast Law School by Ruth Craig. This was a welcome opportunity to observe how our sister law school carries out its training mandate. I would like to record my thanks to all the members of the unit, namely Lou- ise Rouse, Jill Callanan, Ruth Craig, Deirdre Crowley, Dominic Dowling, Sinead Hayes, Brian Magee, Carol Plunkett, Liam Ryan, Nigel Savage and, last but not least, TP Kennedy. Obviously, I would also like to pay tribute to Geoffrey Shannon, our secretary, and all of the teaching staff of the Law School, who constantly meet the con- tinuing challenges placed on them arising out of an ever-evolving legal environ- ment.

Colm Costello, chairman

Ian Moore Employment and Equality Law Committee

The committee made a comprehensive submission to the Department of Enter- prise, Trade and Employment with regard to the Employment Law Compliance Bill 2008, detailing recommendations and proposed amendments to the bill. The committee liaised with the Department of Justice, Equality and Law Reform with respect to concerns about the delay in cases coming on for hearing before the Equality Tribunal. The committee aims to keep practitioners up-to-date with developments in employment and equality case law and legislation. To achieve this, commit- tee members have been involved in a major series of CPD seminars covering a broad range of employment and equality law issues. Articles in the Gazette and the Society’s e-zine have covered such areas as compulsory retirement, 36 Reports of the Law Society’s Non-Standing Committees

employment injunctions and the establishment of the National Employment Rights Authority. The Society’s Employment Law Diploma is now in its third year and we have been working with the Society on the diploma’s development as an online course. The committee completed a review of precedent employment contracts, which have been made available to practitioners. The committee also liaised closely with the Society’s Legal Aid Task Force. The committee will continue to monitor developments in the progress of the Employment Law Compliance Bill 2008 and, where appropriate, will make representations focused primarily on issues of natural justice and the act being readily understood. The committee will hold a seminar on the legislation for practitioners once the legislative process is finalised. The committee will hold a number of information seminars throughout the country to promote the committee’s precedent employment agreement and em- ployment booklet and a greater understanding by practitioners of the contents. Once again, my thanks to Barbara Joyce for her patience in working with us on the preparation of the CPD seminar programme. This year, we were also pleased to welcome several new members who have enthusiastically engaged in the work of the committee. I thank all committee members for their contri- bution, and particularly Geraldine Hynes, vice-chair, and our secretary, Rory O’Boyle, for their work and support throughout the year.

Ian Moore, chairman

EU and International Affairs Committee

The primary role of the committee is to monitor and report on relevant legal developments at EU and international level that impact on, and are of interest to, the profession. In what was a busy year, the committee, in conjunction with a number of lo- cal bar associations, organised a series of EU law seminars on topics as diverse as EU public procurement law and the EU arrest warrant. In September, the committee, in conjunction with the American Bar As- sociation, organised the ABA Section of International Law ‘Fall Meeting 2007’, Dublin module. Conference topics included ‘Cartel criminalisation in Ireland and Europe’ and ‘Northern Ireland: the historical conflict resolution and the applica- tion of the rule of law’. Philip Andrews The committee continues to establish and maintain fruitful relationships with both European and international legal organisations. In December, the commit- tee co-hosted, with the German-Irish Business Association, an extremely inter- esting talk by EU Commissioner Charlie McCreevy. In addition, in conjunction with the European Commission Representation in Ireland, the annual debate in February was well attended by students from the law schools in Dublin and Cork, King’s Inns and Belfast. The committee also remains the reporting body for delegates to the Council of Bars and Law Societies of Europe, the Union Internationale du Notariat Latin and the International Bar Association. We continue to work with the Law Society and the Bar Council in conjunc- tion with Irish Aid on programs relating to the rule of law in the developing world. I wish to express my sincere gratitude to the committee for all their hard work and to committee secretary, Eva Massa, for her sterling work and enthusi- astic endeavour.

Philip Andrews, chairman Reports of the Law Society’s Non-Standing Committees 37

Family Law Committee

The Family Law Committee this year launched the Family Law Handbook, which replaces the Family Law in Ireland Code of Practice leaflet. Family law in Ireland has seen very significant changes in recent times. Solicitors, and all who deal with the difficulties that arise when family relationships break down, need to adapt both to changes in the legal environment and to changes in society in general, and it is hoped that this publication will be of enormous benefit to those currently practising family law, as well as those just entering into practice. Such was the success of the 2006 Family Law Conference that it was necessary to hold a two-day seminar/workshop at the end of November last year. Speakers covered a vast array of interesting and relevant topics. A further conference is planned for 5 December and will examine key developments in family law. Sinead Kearney Among the most notable achievements this year was the submission drafted by the committee in response to a request by the Joint Committee on the Con- stitutional Amendment on Children. The purpose of the submission was to dis- cuss the potential effects emanating from the proposed constitutional amend- ment concerning the rights of the child. However, after exhaustive discussions at committee level with regard to the proposed constitutional amendments, it was decided by government not to proceed with the referendum. Practitioners in the area of family law will be aware of the increased focus nowadays on trying to resolve family disputes outside of the adversarial court process. They also recognise the wide range of dispute resolution models that can be promoted within the legal profession for the benefit of the community. It was with this in mind that the committee jointly hosted a conference with the Legal Aid Board on alternative dispute resolution in family law matters. It is hoped that the committee will consult further over the coming months with the Legal Aid Board on other pertinent matters Finally I would like to take this opportunity to express my gratitude and ap- preciation to all committee members for their time, commitment and hard work during the course of the year, with particular thanks to our dynamic and hard- working secretary Colleen Farrell.

Sinead Kearney, chairman

‘Rule of Law Project’ seeks justice for all

The objective of the Law Society’s and Bar Council’s joint ‘Rule of Law Project’ is to develop and enhance the rule of law in the developing world, with the assistance of Irish aid. The intention is to make human rights, democracy, good governance and justice available to all people. At present, there are four ongoing Rule of Law projects in Ethiopia, South Africa, Kosovo and Bosnia. The first three largely concentrate on the education of members of the judiciary, lawyers and trainee lawyers in many areas of law. The Bosnian project is dedicated to the reconstruction of the court system. Significant work has already been achieved in the writing of a set of court rules. These projects are managed by individual members of the Law Society and Bar Council and involve the commitment and dedication of teams of solicitors and barristers who design the project, seek indepen- Pakistani lawyers were assaulted by police during a peaceful dent funding and organise everything from the basic practicalities to the anti-Musharraf protest in Lahore on 29 November 2007 (Pic: Arif Ali/AFP/Getty Images) delivery of the project – all in their own time. 38 Reports of the Law Society’s Non-Standing Committees

Gazette Editorial Board

This is a committee that is only as good as our colleagues in the profession allow us to be. We meet every two months, and our function is not to edit the magazine, but rather to provide guidance and ideas for the editorial team, which is superbly marshalled by Mark McDermott. However, we require quality contributions from the profession and, in gen- eral, that is exactly what we get. Our main task is to review the quality of the recent issues and, more importantly, decide upon material for future magazines. Our main criteria remain relevance and readability. Our job is to seek expertise in the main diverse areas of law that the readers want to see in their magazine. It requires some effort and feedback from colleagues, but we believe it is worth it on a number of levels. Stuart Gilhooly If you are asked to provide an article, please remember that the personal satisfaction of having an article printed in your trade magazine can be huge and, in addition, you have the knowledge that the magazine has been improved again by the provision of your expertise. It is essential for the continued success of the Gazette that we tap into the large reservoir of talent out there in our profession and provide something for all solicitors, no matter what area of law you specialise in. As usual, I wish to thank the committee, as well as editor Mark McDermott and his team, for their excel- lent contributions throughout the year.

Stuart Gilhooly, chairman

Society calls for major amendments to Immigration Bill 2008

In an 86-page submission to the Oireachtas Committee on Justice, Equal- ity, Defence and Women’s Rights, the Law Society called for 57 major amendments to the Immigration, Residence and Protection Bill 2008. While the Society welcomed the unique opportunity to consolidate and clarify the law in relation to immigration and protection and to ensure compliance with international and regional standards, grave concern was expressed in relation to the manner in which the state chose to imple- ment these changes. In order to ensure “legal certainty, clarity and accessibility”, the Society recommended that the bill be divided into two bills, dealing with immigration law and protection law issues separately. It also called for a re-examination of the manner in which the bill allowed for a large

Olivia Agbonlahor, with her son Great and daughter Melissa, amount of executive discretion. The submission noted that it would make outside the High Court in Dublin (Pic: Collins Photo Agency) it “extremely difficult to verify that the provisions of the bill comply with international, regional and domestic human rights standards” if these amendments were not introduced. It also recommended the deletion of provisions that allow for sum- mary deportation, a reduction in the time in which to bring a judicial review application, non-suspensory judicial review, and the penalty for legal representatives who take a case that is, in the opinion of the judge, “frivolous or vexatious”. The Society stated that all “of these provisions are in breach of recog- nised constitutional and international human rights standards”. Reports of the Law Society’s Non-Standing Committees 39

Guidance and Ethics Committee

Nine scheduled meetings of the Guidance and Ethics Committee were held. Virtually all meetings were very well attended by the volunteer members, all of whom were enthusiastic and contributed positively, applying themselves to the various issues that arose and, it appears, continue to arise with a degree of in- creasing urgency. The committee could not function efficiently without the com- mitment and competence of its secretary, Therese Clarke. Brendan Twomey clearly enjoys legal research and has been a very able vice-chairman throughout the year. The main effort of the committee for 2008 was to improve awareness within the profession of documents and precedents that have been prepared by the committee over the years. Committee members linked into various seminars and CPD sessions to promote the committee’s work and its publications. James Cahill

• The committee has published a precedent letter of engagement (terms and conditions) and letter of disengagement for use by solicitors in conjunc- tion with their section 68 requirements. This will help improve the quality of service for solicitors who adopt it. • A new section 68 leaflet has been prepared and will be available to the pro- fession shortly. Both of these precedent documents have received a plain- English certification. • The committee is also looking at the administration of oaths and will con- sider whether to recommend to the Council of the Law Society that they promote a change in legislation to allow solicitors administer oaths in routine documents in conveyancing transactions. • In April, a meeting of a panel of solicitors to assist solicitors in difficulty with the Law Society was held. That proved to be a very useful exercise in up- grading the information available to panel members, and especially for those without experience with complaints handling. • The committee is currently researching the issue of conflict of interest and is tracking very interesting research being done by the Canadian bar. The committee hopes to issue a report that will be of use to solicitors in recogn- ising conflicts before they arise, and to assist solicitors handling them when conflicts do arise. • Also considered was the issue of solicitors certifying their own title to a lend- ing institution on foot of a personal mortgage by the solicitor. This matter will now be considered at Council level.

James Cahill, chairman

Colin Daly Human Rights Committee

The Human Rights Committee continued its busy programme of activities and to develop new initiatives. We hosted the 2007 Annual Human Rights Conference (in conjunction with the Irish Human Rights Commission) on the topic of human rights and criminal justice. The 2008 conference will focus on the European Convention on Human Rights, five years on. The committee continues to promote the advancement of human rights through a study on the impact of the European Convention on Human Rights Act 2003 on Irish law (jointly sponsored by the DSBA), due to be published in late 2008. The committee also sponsored a report on the disclosure of criminal convictions in conjunction with a number of community/legal groups. We also 40 Reports of the Law Society’s Non-Standing Committees

made submissions on the Immigration, Residence and Protection Bill 2008, the National Strategy on Human Trafficking and the Returns Directive. In May 2008, the Chief Justice of Canada, Beverley McLachlin, delivered a tour de force Annual Human Rights Lecture on the topic of the protection of hu- man rights in Canada. We continued our educational initiatives with the annual Human Rights Es- say Competition and the regular human rights page in the Gazette. The com- mittee and the Irish Human Rights Commission are sponsoring a Human Rights Schools Art Exhibition to celebrate the 60th anniversary of the Universal Declara- tion on Human Rights. I would like to thank the vice-chairman, Michael Kealey, and all commit- tee members for giving so generously of their time, interest and expertise. I would like to thank the Council and staff of the Law Society for their support and encouragement to the committee, and in particular my thanks go to Elaine Dewhurst, newly appointed secretary to the committee, for her unfailing good humour, dedication and expert help.

Colin Daly, chairman

Law Reform Committee

The committee has been engaged in a series of influential reports in the past year. A report entitled Enforcement of Environmental Law: the Case for Reform was launched in April 2008 and received a very positive response from both practitioners and the government. The committee is also engaged in an ongoing report on divorce law in Ireland, which is due to be completed in late 2008 or early 2009. The committee’s latest project relates to the law on consumer debt in Ireland. The ninth annual Law Reform Student Essay Competition was a great suc- cess. The competition received a great number of entries of outstanding quality. The committee would like to pay special tribute to the three judges, Mr Justice John McMenamin, Prof Irene Lynch-Fannon and Mr Michael Irvine, for their ex- Peter Fahy pert adjudication of the competition. The committee will also be launching Law and Practice: Essays on Reform, which contains a selection of the best essays

Enforcement of environmental law: the case for reform

The Society’s Law Reform Committee launched Enforcement of Environ- mental Law: The case for reform in April. The report examines the roles of the state and its citizens in enforcing and complying with environmental law in Ireland and identifies systematic failures in the Irish environmental enforcement landscape. Among the chief recommendations are 16 comprehensive alterations to the current enforcement mechanisms. The responsibility of corporate enterprises is one of the major themes addressed in the report, along with greater access to the system for citizen enforcers, including provid- ing a right of access to information and a statutory right to complain. It advocates that the remit of the Legal Aid Board should be expanded to include such public-interest actions. Other more fundamental reforms are also recommended, such as the adoption of environmental agreements and pre-emptive cost orders. Reports of the Law Society’s Non-Standing Committees 41 submitted to the Law Society’s competition later this year. Each essay, selected for its individual excellence, critically examines specific areas of law, examines ways in which it might be improved, and has proposals for reform. The committee also made a submission to Cosc on the National Strategy on Domestic, Sexual and Gender-based Violence in Ireland. The committee is plan- ning a series of seminars in the area of law reform in the coming months. As chairman, I would like to thank vice-chairman Philip Smith and all com- mittee members and co-opted members of subgroups, the environmental law subgroup in particular, for their tireless work during the year. I would also like to thank our secretary, Elaine Dewhurst, for her dedication and commitment to law reform.

Peter Fahy, chairman

Litigation Committee

The Litigation Committee remains one of the busiest and most eclectic of Law Society committees. Comprising specialists from the areas of commercial, per- sonal injuries, mental health, insurance and general civil litigation, we continue to provide guidance and information to our colleagues. In addition to this, we have engaged in a number of initiatives designed to assist the profession. We are currently finalising a revised booklet of medico- legal recommendations to take into account the changes brought about by PIAB and recent court decisions. The committee has entered into negotiations with the Mental Health Com- mission in relation to the quality assurance proposals and other service related matters. Two committee members undertook a project of providing workshops around the country to assist attending colleagues to ensure the fairest possible Stuart Gilhooly result for our clients in personal injury cases, and this has proved to be an over- whelming success. We intend to produce a handbook for personal injury practitioners next year and will be seeking to encourage a substantial increase in the level of solicitor advocacy over the next 12 months. I would like to thank of all my committee members for their hard work and attendance during the year and particularly pay tribute to secretary Colette Carey and her assistant Anthea Moore, who continue to deal with a myriad of different queries daily with no end of skill and good humour.

Stuart Gilhooly, chairman

Justin McKenna Probate Administration and Trusts Committee

Padraig Courtney, our hard-working secretary, receives queries from all around the country on a regular basis. Many of them he handles himself, but a large part of each meeting is spent addressing practical common concerns. The queries range from ethical dilemmas, such as whether to act for the estate of a deceased person, to the practical issues of what to charge and how long to keep a file. Queries such as these prompted Tom Martyn to write a feature article in the July Gazette on the subject of solicitor executors. Many of the dif- ficulties reported to the Law Society by way of complaint in probate cases could be avoided if the solicitor kept beneficiaries informed of the progress of the administration on a regular basis. The committee is concerned that the disc distributed to members of the 42 Reports of the Law Society’s Non-Standing Committees

profession in 2006 in the matter of enduring powers of attorney should be util- ised to greater effect than would appear to be the case. I am pleased to welcome Cliona O’Tuama, an Irish solicitor in London, as consultant to the committee. She will bring valued expertise from her long expe- rience as a practitioner in England and Wales. I would like to thank especially my vice-chairman, Nora Lillis, for her tireless assistance. I am also mindful of the special effort made by committee members to attend meetings in headquarters, particularly those such as Tom, Pat and Richard, who travel many miles to offer their contributions.

Justin McKenna, chairman

Public Relations Committee

The year under review was not the ideal year to be chairman of the PR Commit- tee! Hardly had the new committee got down to business than the Lynn/Byrne issues broke and caused a great deal of controversy in both the press and the profession. The committee is acutely aware that there are two ‘audiences’ for our PR – the public at large and the profession itself. In relation to the public, it quickly became obvious that, because of the legal restraints on the Society, it could not comment publicly at all in relation to these issues, much as it might have liked to have done. It was also clear that there would never be any objective or dispas- sionate debate or reporting on the issues in the media and that therefore the best PR approach was to say nothing. Professional advice was sought, which Patrick Dorgan confirmed that view. A significant amount of the committee’s time was then taken up in explaining this approach to the profession by every means possible, and especially utilising meetings between the president and the director general and the presidents and secretaries of bar associations and attendance at local bar association meetings. In line with the approach of the Society not to be distracted by controver- sies from its day-to-day business, the committee reviewed the feedback on the advertising campaign carried out last year for the Society – both from the profession and from Behaviour and Attitudes, the research firm engaged for this purpose. Buoyed by the 74% of solicitors who said that the Society should continue with advertising to promote the profession (even if a smaller number – about 50% – were not in favour of the cartoon format), the committee has com- missioned various presentations from advertising agencies and other specialists, and it is hoped that a new and quite different media campaign will commence in the autumn. The committee continues to advise the Council and the executive in relation to PR strategies and has also worked hard at fostering media and similar train- ing for the large number of colleagues who have been interviewed on various topics on both local and national radio and TV. In addition, individual members of the committee routinely appear on local and national radio and in other media to project local and national messages relevant to the profession. I would like to thank Mark McDermott and the staff of the Gazette office for their hard work and commitment, not only to committee affairs, but also to PR issues and the image of the professional generally.

Patrick Dorgan, chairman Reports of the Law Society’s Non-Standing Committees 43

First solicitor Taoiseach in history of state

A solicitor was elected Taoiseach for the first time in the history of the state on 7 May 2008. Brian Cowen was admitted to the Roll of Solici- tors in 1983, subsequently practising in the firm O’Donovan & Cowen in Tullamore, Co Offaly. Mr Cowan was elected to the Dáil in 1984 in a by-election following the untimely death of his father. He has continued to represent the voters of Laois-Offaly since then. In the May 2007 general election, he recorded the highest vote of any candidate in the country, recording 19,102 first preferences. Within hours of Mr Cowen’s election as Taoiseach, President of the Law Society James MacGuill wrote to him: “It is my very great honour and privilege on behalf of the solicitors’ profession to congratulate you on your election as Taoiseach today.” He continued: “As citizens, we wish you every success and good fortune in discharging your onerous respon- sibilities. As colleagues, we take a particular pride in your achievements Brian Cowen speaks to the media following his election as to date and wish you well in the future.” Taoiseach on 7 May 2008 (Pic: Photocall Ireland)

Taxation Committee

The committee’s main focus this year was its collaboration with the Conveyanc- ing Committee in revising the VAT special condition in the contract for sale in order to take account of major changes in the VAT on property regime. The joint subcommittee also worked towards the production of an appropriate clause for leases and a precontract enquiries list. This was a lengthy and technically dif- ficult task that is continuing with the revision of the relevant requisitions on title/ precontract enquiries. The establishment of a Commission on Taxation prompted the committee to review the many tax issues and system anomalies that it believed could be highlighted to the commission, and a comprehensive submission was made. Committee members continued to represent the profession, and tax prac- titioners in particular, on Revenue’s Main Tax Administration Liaison Commit- Pat Bradley tee and six of its subcommittees, as well as contributing to a special Revenue think tank set up to deal with issues relating to the VAT on property changes. The committee also took the opportunity to participate in Revenue’s consulta- tion process in advance of the introduction of e-stamping in 2009. The annual Tax Guide and the Society’s annual prebudget submission to the Minister for Finance made their respective scheduled appearances. Other matters appearing on the agenda included the monitoring of relevant legislation, dealing with practitioner queries, and liaison with the Society’s Probate, Administration and Trusts Committee on matters of mutual interest. I would like to thank the members of the committee and Colette Carey, the committee secretary, for their dedication, interest and support throughout what has been an exceptionally busy committee year. A special word of thanks is due to Michael O’Connor and the members of the joint subcommittee for their ongo- ing work in relation to the new VAT on property provisions.

Pat Bradley, chairman 44 Reports of the Law Society’s Non-Standing Committees

Technology Committee

The main functions of the Technology Committee are to monitor developments in technology that are relevant to the legal profession and to promote the use of technology as a business resource within the profession. In addition, it provides assistance and advice to individual members on a one-to-one basis throughout the year. The committee held a practical workshop in the Sligo Institute of Technology on 23 May, where delegates gained experience on how to use the internet as a research tool and how to use the Courts Service online facilities. The committee is in the process of organising a conference on ‘Virtual Real- ity – Towards Electronic Conveyancing’ in November. The conference will give a complete overview of what the Society has proposed in its ‘eVision’ plan in Patrick Madigan relation to e-conveyancing and will also have presentations on e-stamping by Revenue, e-registration by the Property Registration Authority and EFT by the banks. The committee’s representatives on the eConveyancing Task Force have contributed to the production of the eVision plan, which was presented to the LRC in July. A watching brief is being kept on the development of digital signa- tures, as this will play a significant part in e-conveyancing. A number of meetings and presentations have taken place with the Revenue Commissioners on the e-stamping project. Detailed specifications have been submitted so that the system will be of benefit to the profession. A report on security issues that practitioners should be aware of has just been finalised and will be published in a forthcoming issue of the Gazette. The committee is arranging to meet with IT suppliers who deal primarily with the legal profession to view the systems they have on offer. The committee’s page on the Law Society website is a valuable source of information for the profession. It includes a number of guides on issues relating to technology. It also provides several links to forms available in electronic for- mat that can be accessed and downloaded in seconds. The committee is trying to establish a list of ‘frequently asked questions’ and invites solicitors to submit questions that it will answer and include on the page. A special thanks to our secretary, Veronica Donnelly, and all of the hard- working members of the Technology Committee, including our newest member, Raymond Smith.

Patrick Madigan, chairman

Calcutta Run celebrates 10th anniversary by breaking €2M barrier!

The annual Calcutta Run – which celebrated its tenth anniversary in 2008 – surpassed its target by raising €340,000 for the GOAL orphanages in Calcutta and the Fr Peter McVerry Trust in Dublin. The grand total pushed the overall funds raised over the last ten years to an astonishing €2 million. The target was achieved by a mix of enthusiastic solicitors, trainees, Law Society staff, families and friends, who set off from the Society’s headquarters on the 10k run/walk through Phoenix Park, before heading back to Blackhall Place to be met by a cheering crowd of supporters. Thanks to sponsor support, every cent raised goes to both charities.

(Pic: Lensmen) Law Society committees and their members 45

STANDING COMMITTEES Property Strategy Subcommittee Gillian Keating Complaints and Client Relations James MacGuill Neil Keenan Chair: John P Shaw John D Shaw Patricia McGovern Vice-chair: Simon Murphy Michael Irvine Mark Pery-Knox-Gore John J Buckley Philip Joyce Alvin Price Andrew Cody Noeleen Redmond Gus Cullen Money-laundering Reporting Colin Sainsbury Maura Derivan Chair: Simon Murphy Michael Twomey Stuart Gilhooly James McCourt Secretary: Joanne Wright Patricia Harney John O’Connor Liam Kennedy John Elliot Conveyancing Barry MacCarthy Secretary: Tina Beattie Chair: Barry MacCarthy Margaret Mulrine Vice-chair: Majella Egan Michelle Ní Longáin Professional Indemnity Insurance Suzanne Bainton James O’Sullivan Chair: Niall Farrell Gareth Bourke Lay members: Vice-chair: Dan O’Connor Gabriel Brennan Frank Brennan Donald Binchy Joan Byrne Vera Hogan Eamon Harrington Orla Coyne John McDonnell Rosemarie Loftus William Devine Lenore Mrkwicka Patrick Mullins Patrick Dorgan Secretary: Linda Kirwan Secretary: Rosemary Fallon Deirdre Fox Morette Kinsella Coordination Regulation of Practice Dan O’Connor Chair: James MacGuill Chair: John O’Connor Miriam O’Connor Philip Joyce Vice-chair: Michael Quinlan Kevin O’Higgins John D Shaw Helen Collins Stephen O’Riordan Donald Binchy Paul Connellan Robert Potter-Cogan Ken Murphy Martin Crotty John Reidy Mary Keane Mortimer Kelleher Alma Sheehan Secretary: Mary Keane Martin Lawlor Patrick Sweetman James McCourt Joseph Thomas Education Jarlath McInerney Consultants: Chair: James O’Sullivan Michele O’Boyle John F Buckley Vice-chair: Michelle Ní Longáin Louise Rouse Brian Gallagher Barbara Cotter Alma Sheehan Rory O’Donnell Gerard Doherty Boyce Shubotham Secretary: Catherine O’Flaherty Martin Lawlor Lay observers: Dan O’Connor Frank Bowen Corporate and Public Sector Claire O’Regan Cecil Donovan Chair: Edward Hughes Michael Peart Secretary: John Elliot Vice-chair: Andrew O’Flanagan Michael Quinlan Colin Babe Ex officio: Caroline Dee-Browne James MacGuill NON-STANDING COMMITTEES Mary Cummins John D Shaw Bill Fleury Donald Binchy Arbitration and Mediation Vivienne Kane Consultants: Chair: Joseph Kelly Sylvia Keane Michael V O’Mahony Vice-chair: Eamon Harrington Donall King Stuart Gilhooly Roddy Bourke Geraldine McAlinden Secretary: Paula Sheedy Michael Carrigan Jane Meehan Larry Fenelon Mary O’Connor Finance Anthony Hussey Secretary: Louise Campbell Chair: Gerard Doherty Liam Keane Vice-chair: Donald Binchy John Madden Criminal Law John Costello Michael Moran Chair: Dara Robinson Cecil Donovan Patrick Mullins Vice-chair: Claire Loftus Michael Irvine Frank Murphy Yvonne Bambury Philip Joyce Simon Murphy Shalom Binchy James McCourt Secretary: Colleen Farrell Conal Boyce Tom Murran Frank Buttimer Owen O’Connell Business Law Paul Connellan James O’Sullivan Chair: Mark Ryan Alan Gannon Ex officio: James MacGuill Vice-chair: John Olden Bernadette Greene John D Shaw Deirdre Ahern Grainne Malone Consultant: Walter Beatty Snr Colin Babe Margaret McEvilly Secretary: Cillian MacDomhnaill Liam Brazil Patrick J McGonagle Joy Compton Emer O’Sullivan Administrative Subcommittee on Tom Courtney Mairéad Quigley Finance Maire Cunningham Hugh Sheridan James MacGuill Eleanor Daly Consultants: John D Shaw David Dillon Barry Donoghue Donald Binchy Gerald FitzGerald Michael E Hanahoe Gerard Doherty Gerard Flynn James MacGuill Philip Joyce Ann Henry Michael Staines Ken Murphy Robert Heron Secretary: Colette Carey Secretary: Ken Murphy Paul Keane 46 Law Society committees and their members

Curriculum Development Unit Gazette Editorial Board Probate, Administration and Trusts Chair: Colm Costello Chair: Stuart Gilhooly Chair: Justin McKenna Vice-chair: Louise Rouse Paula Fallon Vice-chair: Nora Lillis Jill Callanan Michael Kealey Pat Bradley Ruth Craig Mary Keane Paula Fallon Deirdre Crowley Aisling Kelly Richard Hammond Dominic Dowling Patrick J McGonagle Tom Martyn Sinead Hayes Ken Murphy Susan O’Connell TP Kennedy Philip Nolan Kevin O’Higgins Brian Magee Secretary: Mark McDermott Margaret Walsh Carol Plunkett Consultant: John O’Connor Liam Ryan Guidance and Ethics Secretary: Padraic Courtney Nigel Savage Chair: James Cahill Secretary: Geoffrey Shannon Vice-chair: Brendan Twomey Public Relations John Costello Chair: Patrick Dorgan Employment and Equality Law Brendan Dillon Vice-chair: Niall Farrell Chair: Ian Moore Graham Farrell Maura Derivan Vice-chair: Geraldine Hynes Edward Hughes Dominic Dowling Andrew Cody Stephen Maher John Glynn Maura Connolly Brid Mimnagh Michael Kealey Diarmuid Cunningham Kevin O’Higgins James McCourt Loughlin Deegan Frances Twomey Ken Murphy John Dunne Secretary: Therese Clarke Tom Murran Gina Drum Michelle Ní Longáin Seamus Given Human Rights Michele O’Boyle Joanne Hyde Chair: Colin Daly Secretary: Mark McDermott Michael Kennedy Vice-chair: Michael Kealey Fergus Long Noeline Blackwell Taxation Terence McCrann Grainne Brophy Chair: Pat Bradley Peter McInnes Alma Clissmann Vice-chair: Tom Martyn Catherine O’Flynn Betsy Farrell Cormac Brown Ciaran O’Mara Michael Farrell John Cuddigan Emma O’Neill Michael Finucane Ciaran Desmond Hugh O’Neill Brian Gallagher Caroline Devlin Jennifer O’Neill Catherine Ghent Donal Kennedy Moya de Paor Ailbhe Hegarty Aileen Keogan Boyce Shubotham Barbara Joyce David Lawless Secretary: Rory O’Boyle James MacGuill Greg Lockhart Brian McKenzie Michael O’Connor EU and International Affairs Colm Stanley Des Rooney Chair: Philip Andrews Secretary: Elaine Dewhurst Emmet Scully Vice-Chair: John Kettle James Somerville Mary Casey Law Reform Consultants: Geraldine Clarke Chair: Peter Fahy Brian Bohan Niamh Connery Vice-chair: Philip A Smith John O’Connor Philip Daly Peter Allen Secretary: Colette Carey David Geary John Costello Michael Greene Brian Gallagher Technology Michael Irvine Rosemary Horgan Chair: Patrick Madigan Jnr Ann Marie Kearney Barbara O’Mara Vice-chair: Neil Butler TP Kennedy Geoffrey Shannon Anthony Brady Peter White Deborah Spence John Furlong Consultant: John Fish Secretary: Elaine Dewhurst Jim Heney Secretary: Eva Massa Eamonn Keenan Litigation Frank Nowlan Family Law Chair: Stuart Gilhooly Tom O’Malley Chair: Sinead Kearney Vice-chair: Ronan O’Neill Reamonn Smith Vice-chair: Hilary Coveney Roddy Bourke Paul Tracey Phil Armstrong Michael Boylan Secretary: Veronica Donnelly David Bergin Michael Enright Noeline Blackwell John Galvin Geraldine Carthy Áine Hynes Helene Coffey Mike Kavanagh Stephanie Coggans Joseph Kelly Carol Ann Coolican Joe Mannix Eugene Davy David Martin Rosemary Horgan Dermot McEvoy Marie Keane Cormac O’Hanlon Joan O’Mahony Patrick O’Riordan Deirdre O’Riordan Owen O’Sullivan Moya Quinlan Kenneth Ruane Aidan Reynolds Frances Twomey Geoffrey Shannon Consultants: Consultants: Joseph Deane Ann Fitzgerald Patrick Groarke Pauline O’Reilly Secretary: Colette Carey Secretary: Colleen Farrell Parchment Ceremonies 47

Parchment ceremonies 2007/08

Over 500 trainees received their parchments from the Law Society during the year 2007/08. In all, 12 parchment ceremonies were held at Blackhall Place, attended by members of the judiciary, President of the Law Society James MacGuill, director general Ken Murphy, special guests and the families of graduates. Here, we present some snapshots of the happy occasion that is parchment day! FINANCIAL STATEMENTS FOR THE YEAR ENDING 2007 Financial statements for the year ending 31 December 2007 49

Statement of responsibilities of the Finance Committee

The Finance Committee is responsible for ensuring that financial statements are prepared each year that give a true and fair view of the state of affairs of the group and the Society and of the group’s surplus or deficit for that period. In preparing those financial statements, the Finance Committee: • Selects suitable accounting policies and then applies them consistently, • Makes judgements and estimates that are reasonable and prudent, and • Prepares the financial statements on the going-concern basis unless it is inappropriate to presume that the Society will continue in business. The Finance Committee is responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Society. The Finance Committee is also responsible for safeguarding the assets of the Society and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Independent auditors’ report to the members of the Law Society of Ireland We have audited the financial statements of the Law Society of Ireland for the year ended 31 December 2007, which comprise the consolidated income and expenditure account, the consolidated balance sheet, the Society balance sheet, the consolidated cash-flow statement, the statement of accounting policies and the related notes 1 to 24. These financial statements have been prepared under the accounting policies set out in the statement of accounting policies. This report is made solely to the Society’s members, as a body. Our audit work has been undertaken so that we might state to the Society’s members those matters we are required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Society and the Society’s members as a body for our audit work for this report or for the opinions we have formed.

Respective responsibilities of the Finance Committee and the auditors As set out in the statement of responsibilities of the Finance Committee, the Finance Committee is responsible for the preparation of financial statements in accordance with accounting standards issued by the Accounting Standards Board and published by the Institute of Chartered Accountants in Ireland (Generally Accepted Accounting Practice in Ireland). Our responsibility, as independent auditors, is to audit the financial statements in accordance with the International Standards on Auditing (UK and Ireland). We report to you our opinion as to whether the financial statements give a true and fair view of the state of affairs of the group and the Society as at 31 December 2007 and of the surplus of the group for the year then ended. We read the other information contained in the annual report and consider the implications for our report if we become aware of any apparent misstatement within it. The other information comprises the report of the director general, the report of the president and the reports of the committees.

Basis of audit opinion We conducted our audit in accordance with the International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the Finance Committee in the preparation of the financial statements and of whether the accounting policies are appropriate to the group’s and the Society’s circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations that we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion, we evaluated the overall adequacy of the presentation of information in the financial statements.

Opinion In our opinion, the financial statements give a true and fair view of the state of affairs of the group and the society as at 31 December 2007 and of the surplus of the group for the year then ended.

Deloitte & Touche Chartered accountants and registered auditors, Dublin, 15 May 2008 50 Financial statements for the year ending 31 December 2007

Statement of accounting policies

Basis of preparation The financial statements have been prepared in accordance with accounting standards generally accepted in Ireland.

Accounting convention The financial statements are prepared under the historical cost convention.

Basis of consolidation The Society consolidates its interests in subsidiary undertakings as detailed in note 22 and its interest in the related un- dertaking the Law Club of Ireland, which it controls, all of which make up the financial statements to 31 December 2007.

Income Income is recognised in the income and expenditure account in the year to which it relates.

Depreciation Depreciation is provided on a straight-line basis at the rates shown below, which are estimated to reduce the assets to their residual values by the end of their expected useful lives.

Development site: not depreciated Premises: 2% per annum Furniture, fittings and equipment: 20% per annum Computer equipment: 20% per annum Motor vehicles: 25% per annum Leasehold improvements: 20% per annum

Financing transactions Assets acquired under financing arrangements are accounted for as assets in the financial statements of the Society, in accordance with the substance of the transactions, where the Society is exposed to the risks and entitled to the ben- efits associated with the asset, in accordance with Financial Reporting Standard 5. The financing costs are taken to the income and expenditure account over the term of the transaction.

Current asset investments Current asset investments are stated at the lower of cost and net realisable value.

Publications Costs relating to the purchase or creation of publications, including books and electronic information and library additions, are written off in the year in which they are incurred.

Pension costs Contributions to a multi-employer defined benefit pension scheme are charged in the income and expenditure account over the anticipated working lives of employee members currently in service.

Taxation Taxation is provided on taxable profit at current rates. Deferred tax is accounted for on a full provision basis, as required by Financial Reporting Standard 19, to the extent re- quired by that standard, on all timing differences that have originated but not reversed by the balance sheet date. Deferred tax assets are recognised to the extent that they are regarded as more likely than not to be recoverable.

Stocks Stocks are stated at the lower of cost and net realisable value. Cost includes all expenditure that has been incurred in the normal course of business in bringing them to their present location and condition. Net realisable value is the actual or estimated selling price net of trade discounts, less further costs to completion and all costs to be incurred in marketing, selling and distribution. Financial statements for the year ending 31 December 2007 51

Consolidated income and expenditure account for the year ended 31 December 2007

Notes 2007 2006 INCOME € € Fees and subscriptions 4 10,892,014 9,751,800 Education activities 5 12,421,317 10,938,338 Publications 1,105,332 1,142,903 Four Courts rooms 680,569 644,174 Company formations 269,241 328,153 Interest and investment income 7 190,542 72,437 Other income 8 743,284 727,243 Sundry income - 24,716

26,302,299 23,629,764

EXPENDITURE Operating charges: – general activities 4 10,031,739 8,631,113 – education activities 5 10,042,057 9,514,582 Financing costs 6 316,846 490,534 Other expenditure 8 1,592,637 1,532,457

21,983,279 20,168,686

SURPLUS FOR YEAR BEFORE TAXATION 2 4,319,020 3,461,078

Taxation charge 9 (277,525) (174,547)

SURPLUS FOR YEAR AFTER TAXATION 17 4,041,495 3,286,531

Allocated as follows: General activities (243,937) 100,020 Education activities 1,249,895 609,364 Education Centre fund 1,151,454 964,593 Property fund 1,884,083 1,136,837 Capital expenditure fund - 475,717

Total 4,041,495 3,286,531

All income arose from continuing operations and all recognised gains and losses are included in the income and expendi- ture account.

The financial statements were approved by the Finance Committee on 15 May 2008 and signed on its behalf by:

Gerard Doherty, Chairman of the Finance Committee James MacGuill, President of the Law Society of Ireland 52 Financial statements for the year ending 31 December 2007

Consolidated balance sheet as at 31 December 2007

FIXED ASSETS Notes 2007 2006 € € Tangible fixed assets 10 36,421,654 36,451,741

CURRENT ASSETS

Investments 13 6,500,498 5,765,858 Stocks 14 19,219 23,161 Debtors 15 1,769,424 1,856,307 Cash at bank and in hand 72,022 161,430

8,361,163 7,806,756

CURRENT LIABILITIES

CREDITORS (amounts falling due within one year) 16 (6,822,629) (6,643,117)

NET CURRENT ASSETS 1,538,534 1,163,639

TOTAL ASSETS LESS CURRENT LIABILITIES 37,960,188 37,615,380

CREDITORS (amounts falling due after more than one year) 16 (10,457,824) (14,154,511)

NET ASSETS 27,502,364 23,460,869

RESERVES Accumulated reserves 17 27,502,364 23,460,869

The financial statements were approved by the Finance Committee on 15 May 2008 and signed on its behalf by:

Gerard Doherty, Chairman of the Finance Committee James MacGuill, President of the Law Society of Ireland Financial statements for the year ending 31 December 2007 53

Balance sheet as at 31 December 2007

FIXED ASSETS Notes 2007 2006 € € Tangible fixed assets 10 14,582,083 14,559,278

CURRENT ASSETS Investments 13 6,500,498 5,765,858 Debtors 15 23,974,629 24,017,797 30,475,127 29,783,655 CURRENT LIABILITIES

CREDITORS (amounts falling due within one year) 16 (6,934,771) (6,633,140)

NET CURRENT ASSETS 23,540,356 23,150,515

TOTAL ASSETS LESS CURRENT LIABILITIES 38,122,439 37,709,793

CREDITORS (amounts falling due after more than one year) 16 (10,457,824) (14,154,511)

NET ASSETS 27,664,615 23,555,282

RESERVES

Accumulated reserves 17 27,664,615 23,555,282

The financial statements were approved by the Finance Committee on 15 May 2008 and signed on its behalf by:

Gerard Doherty, Chairman of the Finance Committee James MacGuill, President of the Law Society of Ireland 54 Financial statements for the year ending 31 December 2007

Consolidated cash flow statement for the year ended 31 December 2007

Notes 2007 2006 € €

NET CASH INFLOW FROM OPERATING ACTIVITIES 18 7,020,442 4,239,285

RETURNS ON INVESTMENTS AND SERVICING OF FINANCE

Interest received 82,375 72,437

TAXATION

Corporation tax (paid)/received (456,062) 78,054

CAPITAL EXPENDITURE

Purchase of tangible fixed assets (1,503,811) (23,158,869)

MANAGEMENT OF LIQUID RESOURCES

Purchase of investments (2,000,000) (3,233,191)

Disposal of investments 1,373,527 1,904,607

(626,473) (1,328,584)

FINANCING

(Decrease)/increase in debt (3,696,687) 6,814,117

INCREASE/(DECREASE) IN CASH 19 819,784 (13,283,560)

Financial statements for the year ending 31 December 2007 55

Notes to the consolidated financial statements for the year ended 31 December 2007

1. PRESENTATION OF FINANCIAL STATEMENTS

The consolidated financial statements include the financial statements of the Law Society of Ireland and the financial statements of its subsidiary undertakings as outlined in note 22. The results of the Law Club of Ireland are also included, as it is controlled by the Law Society of Ireland.

The financial statements of the Law Society of Ireland include the general and education activities of the Society.

Separate financial statements are prepared for the Law Society of Ireland Compensation Fund and the Law Society of Ireland Scholarship Funds.

2. SURPLUS BEFORE TAXATION 2007 2006 € € The surplus before taxation is stated after charging: – Depreciation 1,533,898 1,484,254 – Auditors’ remuneration 34,000 32,000 – Finance charges 287,528 287,528

and after crediting: – Deposit interest 82,375 72,457

3. STAFF COSTS 2007 2007 2007 2007 2006 General Education Other Total Total activities activities € € € € € Salaries and wages 4,309,250 3,484,641 492,383 8,286,274 7,887,115 PRSI 440,880 348,720 72,456 862,056 755,701 Pension costs 661,145 228,703 14,371 904,219 632,404

Total 5,411,275 4,062,064 579,210 10,052,549 9,275,220

The average aggregate number of employees during 2007 was 143 (2006: 151). 56 Financial statements for the year ending 31 December 2007

4. GENERAL ACTIVITIES (INCLUDING FUNDS) 2007 2006 € € INCOME

Fees and subscriptions Practising certificates 7,170,987 6,245,656 Members’ subscriptions 663,181 630,318 Admission fees 179,709 145,190 Fund contributions: – Capital expenditure fund - 475,718 – Education Centre fund 964,916 915,075 – Property fund 1,913,221 1,339,843

10,892,014 9,751,800 Services and interest Publications 1,105,332 1,142,903 Four Courts rooms 680,569 644,174 Company formations 269,241 328,153 Interest and investment income (note 7) 190,542 72,437 Sundry income - 24,716

Total income 13,137,698 11,964,183

OPERATING CHARGES General activities Pay and related expenditure 3,437,048 2,834,874 Administration expenditure 1,321,023 1,121,150 Premises expenditure 643,668 676,660 Members’ services expenditure 1,532,821 1,226,498 Regulation services expenditure 1,642,968 1,329,632 Admission expenditure 40,878 28,514

Services Company formations 236,582 236,168 Publications 970,692 956,595 Four Courts rooms 206,059 221,022

Total operating charges 10,031,739 8,631,113 Finance cost 29,318 203,006

Surplus 3,076,641 3,130,064

Financial statements for the year ending 31 December 2007 57

5. EDUCATION ACTIVITIES 2007 2006 € € INCOME

Professional practice course I fees 5,112,291 5,331,773 Professional practice course II fees 2,901,205 2,138,950 Indentures and registration 526,336 437,248 Examination fees 1,457,227 1,288,345 Diploma courses 1,034,350 578,173 Continuing professional development 1,194,637 964,983 Miscellaneous income 195,271 198,866

Total income 12,421,317 10,938,338

OPERATING CHARGES

Pay and related expenditure 4,219,240 4,063,354 Administration expenditure 1,963,983 1,900,061 Direct expenditure 3,017,610 2,901,673 Premises expenditure 841,224 649,494

Total operating charges 10,042,057 9,514,582

Financing costs 287,528 287,528

Surplus 2,091,732 1,136,228

6. FINANCING COSTS 2007 2006 € €

Financing costs (note 12) – education 287,528 287,528 Interest payable on loans – general 29,318 203,006

316,846 490,534

7. INTEREST AND INVESTMENT INCOME 2007 2006 € €

Interest – accumulated reserves 4,004 22,919 Interest – Education Centre fund 78,371 49,518 Gain on disposal of investments 108,167 -

190,542 72,437

58 Financial statements for the year ending 31 December 2007

8. OTHER INCOME/EXPENDITURE 2007 2006 € € Income: Catering income 534,157 479,939 Bar income 122,807 155,302 Bed and breakfast income 44,472 46,761 Functions and consultation room income 21,365 23,295 Rental income 14,229 18,819 Sundry income 6,254 3,127

743,284 727,243

Expenditure: Catering cost of sales 269,171 271,917 Catering expenditure 533,366 518,495 Bar cost of sales 68,239 82,917 Bar expenditure 143,040 137,682 Rental expenditure 388,679 191,291 Premises expenditure 8,740 15,366 Professional fees 72,880 236,257 Other administration expenditure 108,522 78,532

1,592,637 1,532,457

9. TAXATION CHARGE 2007 2006 € € Based on the surplus for the year: Taxation charge 277,525 174,547

The effective tax rate for the year is lower than the standard rate of corporation tax in Ireland, which is 12.5%. The differences are explained below: 2007 2006 € € Surplus for year before taxation 4,319,020 3,461,078

Surplus for year multiplied by standard rate of corporation tax of 12.5% 539,878 432,635

Effects of: Income not subject to taxation (340,410) (308,568) Net deductions allowable for tax purposes (18,749) (3,358) Depreciation for year in excess of capital allowances 64,054 44,875 Higher tax rates on interest and rental income 12,311 7,734 Capital gains tax 20,441 1,229

277,525 174,547

The Society is chargeable to taxation on bank and other interest, gains and on net surpluses arising from certain activities, such as publishing and courses, to the extent that they relate to transactions with non-members. There were no material deferred tax timing differences that required to be recognised at 31 December 2007 or 2006. Financial statements for the year ending 31 December 2007 59

10. TANGIBLE FIXED ASSETS

Group Furniture Development Leasehold fittings and Computer Motor Premises site improvements equipment equipment vehicles Total Total € € € € € € € Cost At 1/1/2007 14,555,020 21,718,981 184,757 6,974,847 3,861,889 121,775 47,417,269 Additions 217,161 - 14,498 882,201 389,951 - 1,503,811

At 31/12/2007 14,772,181 21,718,981 199,255 7,857,048 4,251,840 121,775 48,921,080

Depreciation At 1/1/2007 2,803,345 - 166,280 5,314,095 2,675,613 6,195 10,965,528 Charge for year 293,392 - 32,989 723,528 453,575 30,444 1,533,898

At 31/12/2007 3,096,737 - 199,240 6,037,622 3,129,188 36,639 12,499,426

Net book value At 31/12/2007 11,675,444 21,718,981 15 1,819,426 1,122,652 85,136 36,421,654

At 31/12/2006 11,751,675 21,718,981 18,477 1,660,752 1,186,276 115,580 36,451,741

Society Furniture fittings & Computer Motor Premises equipment equipment vehicles Total € € € € € Cost At 1/1/2007 14,410,734 6,687,778 3,861,889 121,775 25,082,176 Additions 217,161 874,300 389,951 - 1,481,412

At 31/12/2007 14,627,895 7,562,078 4,251,840 121,775 26,563,588

Depreciation At 1/1/2007 2,774,488 5,066,602 2,675,613 6,195 10,522,898 Charge for year 293,392 685,901 448,870 30,444 1,458,607

At 31/12/2007 3,067,880 5,752,503 3,124,483 36,639 11,981,505

Net book value At 31/12/2007 11,560,015 1,809,575 1,127,357 85,136 14,582,083

At 31/12/2006 11,636,246 1,621,176 1,186,276 115,580 14,559,278

60 Financial statements for the year ending 31 December 2007

10. TANGIBLE FIXED ASSETS (CONTINUED)

Group and Society

Included in the above are assets relating to education activities: Accumulated Cost depreciation Net book value € € € Premises 5,876,183 857,888 5,018,295 Furniture, fittings and equipment 2,904,637 1,711,413 1,193,224 Computer equipment 2,063,536 1,213,851 849,685

10,844,356 3,783,152 7,061,204

11. ASSETS FINANCED BY FINANCING ARRANGEMENT

Included in tangible fixed assets are the following assets, which are the subject of a financing arrangement (note 12): Accumulated Cost depreciation Net book value € € € Education Centre premises 5,827,485 846,526 4,980,959 Education furniture, fittings and equipment 53,767 53,767 -

5,881,252 900,293 4,980,959

12. FINANCING ARRANGEMENT

The Society financed the development of the Education Centre by means of a sale and leaseback arrangement with a consortium of investors. The substance of this transaction is that the risk and rewards associated with the Education Centre remain with the Society. Accordingly, the Education Centre is carried within tangible fixed assets, with a liability, which is included in creditors falling due after more than one year, established as being the liability to repurchase the assets from the consortium of investors. The principal features of the arrangement are that the Society sold the assets to the consortium for €6.6 million and has the option to repurchase the assets in 2014, being the conclusion of the arrangement, for a fixed price of €7.21 million. The cost of the transaction has been treated as a financing cost and spread over the term of the transaction. Financial statements for the year ending 31 December 2007 61

13. INVESTMENTS 2007 2006 € € Group and Society – at cost 6,500,498 5,765,858

The investments are comprised of the following: a) With-profits bond policy (‘policy’), b) TAM equity and bond investments (‘TAM’), c) Managed fund (‘managed fund’), d) High-yield fund (‘fund’); and e) Trilogy fund (‘Trilogy’)

The policy is linked to a tailored global equity basket. The terms provide for a minimum redemption of 100% of the sum invested upon maturity. TAM, managed fund, fund and Trilogy do not carry capital protection. The managed fund has a low risk profile, while the fund and Trilogy are fully exposed to the volatility in equity markets.

The investment by the Society in subsidiary undertakings is carried at €Nil (2006: €Nil).

14. STOCKS 2007 2006 € € Group Stocks in trade 19,219 23,161

The replacement cost of stock is not significantly different from the above stated cost. 62 Financial statements for the year ending 31 December 2007

15. DEBTORS 2007 2006 € € Group

Amounts falling due within one year: Debtors and prepayments 1,301,850 922,406 Amounts due by the Law Society Compensation Fund 185,430 622,756 Deferred finance costs 51,356 51,356 Corporation tax 3,990 - VAT 21,375 5,175

1,564,001 1,601,693

Amounts falling due after more than one year Deferred finance costs: – Due within 2 to 5 years 205,423 205,423 – Due after more than 5 years - 49,191

1,769,424 1,856,307

Society

Amounts falling due within one year Debtors and prepayments 1,221,109 847,558 Amounts due from the Law Society Compensation Fund 185,430 622,756 Amounts due from subsidiary undertakings – The Law Club of Ireland 54,881 34,272 – Friary Property Services Limited 77,399 95,484 – Benburb Street Property Company Limited 22,000,000 22,000,000 – Ellis Quay Property Services Limited 162,309 111,757 Deferred finance costs 51,356 51,356 Corporation tax 11,497 - VAT 5,225 -

23,769,206 23,763,183

Amounts falling due after more than one year Deferred finance costs: – Due within 2 to 5 years 205,423 205,423 – Due after more than 5 years - 49,191

23,974,629 24,017,797

Financial statements for the year ending 31 December 2007 63

16. CREDITORS 2007 2006 € € Group

Amounts falling due within one year Bank overdrafts 496,621 1,405,813 Creditors and accruals 3,010,276 2,082,564 Deferred income 3,071,600 2,758,359 PAYE/PRSI 187,627 182,169 VAT 56,505 39,665 Corporation tax payable - 174,547

6,822,629 6,643,117

Deferred income represents fees for the 2008 financial year received in the year to 31 December 2007.

2007 2006 Society € € Amounts falling due within one year: Bank overdrafts 461,709 1,395,295 Creditors and accruals 2,917,099 2,010,331 Deferred income 3,071,600 2,758,359 Amounts due to subsidiary undertakings – The Law Club of Ireland 159,133 92,284 – Friary Property Services Limited 55,778 - – Ellis Quay Property Services Limited 94,380 - PAYE/PRSI 175,072 169,742 VAT - 32,582 Corporation tax payable - 174,547

6,934,771 6,633,140

Deferred income represents fees for the 2008 financial year received in the year to 31 December 2007.

Group and Society 2007 2006 € € Amounts falling due after more than one year: – Due within 2 to 5 years – bond funding scheme 124,307 124,307 – Due after more than 5 years – Education Centre 7,216,087 7,216,087 – Bank loan 3,117,430 6,814,117

10,457,824 14,154,511

The bonds of €124,307, which are interest free, are redeemable at the request of the bond holders and are subject to a prize fund draw. The amount due in respect of the Education Centre represents the liability under the financing arrangement (note 12). The bank loan is secured on a site on Benburb Street. 64 Financial statements for the year ending 31 December 2007

17. ACCUMULATED RESERVES

Group Society Capital Education Law School accumulated expenditure Centre Litigation Property accumulated Total reserves fund fund fund fund reserves € € € € € € €

Balance at 1/1/2007 23,460,869 10,699,099 2,843,546 6,066,297 2,133,339 1,136,837 581,751 Surplus for year 4,041,495 (243,937) - 1,151,454 - 1,884,083 1,249,895 Transfers - 865,238 (454,184) - (411,054) - -

Balance at 31/12/2007 27,502,364 11,320,400 2,389,362 7,217,751 1,722,285 3,020,920 1,831,646

Society Society Capital Education Law School accumulated expenditure Centre Litigation Property accumulated Total reserves fund fund fund fund reserves € € € € € € €

Balance at 1/1/2007 23,555,282 10,793,512 2,843,546 6,066,297 2,133,339 1,136,837 581,751 Surplus for year 4,109,333 (176,099) - 1,151,454 - 1,884,083 1,249,895 Transfers - 865,238 (454,184) (411,054) - -

Balance at 31/12/2007 27,664,615 11,482,651 2,389,362 7,217,751 1,722,285 3,020,920 1,831,646

Group and Society The Finance Committee established the above funds to make prudent allocation of reserves for anticipated expenditure in these areas. On an annual basis, monies from fees and subscriptions, income and interest income are allocated to these funds. Transfers between the funds represent internal transfers for projects and other income and expenditure identified by the Finance Committee as being more appropriate to particular funds.

Reconciliation of surplus per consolidated income and expenditure account to surplus for the year per accumulated reserves:

General Education Education Property Total activities activities Centre fund fund Other € € € € € €

Surplus before tax (notes 4 and 5) 5,168,373 3,076,641 2,091,732 - - - Surplus before tax (note 8) (849,353) - - - - (849,353) Taxation (note 9) (277,525) (31,728) (238,067) - - (7,730)

Surplus after tax 4,041,495 3,044,913 1,853,665 - - (857,083) Income allocated to specific fund - (3,035,537) - 1,151,454 1,884,083 - Inter-group trading - (253,313) (603,770) - - 857,083

Surplus per group accumulated reserves 4,041,495 (243,937) 1,249,895 1,151,454 1,884,083 -

Financial statements for the year ending 31 December 2007 65

18. RECONCILIATION OF SURPLUS BEFORE TAXATION TO NET CASH INFLOW FROM OPERATING ACTIVITIES 2007 2006 € € Surplus before taxation 4,319,020 3,461,078 Depreciation charge 1,533,898 1,484,254 Interest received (82,375) (72,437) Profit on disposal of investments (108,167) - Decrease/(increase) in stock 3,942 (2,265) Decrease/(increase) in debtors 90,873 (501,680) Increase/(decrease) in creditors 1,263,251 (129,665)

Net cash inflow from operating activities 7,020,442 4,239,285

19. (a)ANALYSIS OF CHANGES IN NET FUNDS/(DEBT) 2007 2006 € € Decrease in cash during the year (89,408) (11,877,747) Decrease/(increase) in bank overdrafts during the year 909,192 (1,405,813) Decrease/(increase) in debt during the year 3,696,687 (6,814,117) Net (debt)/funds at 1 January (15,398,894) 4,698,783

NET FUNDS AT 31 DECEMBER (10,882,423) (15,398,894)

(b) ANALYSIS OF NET FUNDS/(DEBT)

At At 1/1/2007 Cashflow 31/12/2007 € € €

Cash and bank balances 161,430 (89,408) 72,022 Bank overdrafts (1,405,813) 909,192 (496,621)

(1,244,383) 819,784 (424,599) Debt due after one year (14,154,511) 3,696,687 (10,457,824)

(15,398,894) 4,516,471 (10,882,423)

20. RELATED PARTY TRANSACTIONS During the year, the Society incurred expenditure on behalf of, and recharged it to, the compensation fund in the amount of €2,565,674 (2006: €2,348,714). The amount due from the compensation fund at the year-end is outlined in note 15. 66 Financial statements for the year ending 31 December 2007

21. PENSIONS

The Society and The Law Society of Ireland Compensation Fund are the participants in a multi-employer defined benefit pension scheme, operated by the Society. It is not practicable to separate the assets and liabilities of the scheme and, accordingly, the Society has availed of an exemption under Financial Reporting Standard 17 from making the disclosures required under the standard.

The scheme provides benefits based on final pensionable pay. Contributions to the scheme are charged to the income and expenditure account so as to spread the cost of pensions over employees’ working lives. The contributions are determined by a qualified actuary on the basis of valuations every three years, using the prospective benefits method. The most recent valuation was completed as at 1 January 2007. The assumptions that have the most significant effect on the results of the valuation are those relating to the discount rate, the rates of increase in salaries, and the rate of increase in pensions in payment. In preparing that valuation, it was assumed that the discount rate would be 6% per annum pre-retirement and 5% per annum post-retirement, that future salary increases would average 4.5% per annum, and that pensions in payment will increase at 2.5% per annum on average. In effect, this means that the investment return pre-retirement would be 1.5% higher per annum than future salary increases and the investment return post-retirement would be 2.25% higher per annum than pension increases.

From 1 January 2005, the Society introduced, on a discretionary basis, indexation to pensions in payment on an annual basis. Increases are the lesser of the CPI increase or 3%. Members of the scheme who wish to be considered for this in the future have increased their contribution rate to 8% of pensionable salary. The actuarial results at 1 January 2007 indicated that the market value of the assets of the scheme was €10,590,000 and that the actuarial value of the assets was sufficient to cover 89% of the benefits that had accrued to members, after allowing for expected future increases in pensionable salaries and increases to pensions in payment which are discretionary.

It was agreed that the Society’s annual contribution continue at 18% of pensionable salaries. The actuary carried out an update of the discontinuance position at 1 January 2007 and confirmed that the scheme was fully funded at that date, on that basis.

The pension charge for the year was €904,219 (2006: €632,404).

22. SUBSIDIARY AND RELATED UNDERTAKINGS

The Society holds investments in subsidiary and related undertakings as follows:

Subsidiary undertakings – Friary Property Services Limited – Benburb Street Property Company Limited – Ellis Quay Property Services Limited – Law Club of Ireland*

*The Law Club of Ireland is considered a subsidiary as it is controlled by the Law Society of Ireland.

Related undertakings: – Law Society of Ireland Compensation Fund – Law Society of Ireland Scholarship Fund Financial statements for the year ending 31 December 2007 67

23. CAPITAL COMMITMENTS 2007 2006 € € At the end of the year, the following expenditure had been authorised by the Finance Committee:

Contracted for 276,833 - Not contracted for 90,039 811,894

366,872 811,894

24. CONTINGENT LIABILITIES

The Society is, from time to time, a party to legal proceedings and claims, which arise in the ordinary course of its activities. The Finance Committee is satisfied that there are no claims that require provision by the Society at 31 December 2007. Legal costs incurred by the Society to 31 December 2007, in connection with these matters, have been charged in the income and expenditure account.

68 Law Society of Ireland Compensation Fund

Responsibilities of the Regulation of Practice Committee

The Regulation of Practice Committee is responsible for ensuring that financial statements are prepared each year that give a true and fair view of the state of affairs of the Law Society of Ireland Compensation Fund and of its surplus or deficit for that period. In preparing those financial statements, the Regulation of Practice Committee: • Selects suitable accounting policies and then applies them consistently, • Makes judgements and estimates that are reasonable and prudent, • Prepares the financial statements on the going-concern basis.

The Regulation of Practice Committee is responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the compensation fund. The Regulation of Practice Committee is also responsible for safeguarding the assets of the compensation fund and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Independent auditors’ report to the members of the Law Society of Ireland Compensation Fund

We have audited the financial statements of the Law Society of Ireland Compensation Fund for the year ended 31 December 2007, which comprise the income and expenditure account, the statement of total recognised gains and losses, the balance sheet, the statement of accounting policies and the related notes 1 to 13. These financial statements have been prepared under the accounting policies set out in the statement of accounting policies. This report is made solely to the Society’s members, as a body. Our audit work has been undertaken so that we might state to the Society’s members those matters we are required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Society and the Society’s members as a body for our audit work for this report or for the opinions we have formed.

Respective responsibilities of the Regulation of Practice Committee and auditors As set out in the statement of responsibilities, the Regulation of Practice Committee is responsible for the preparation of financial statements that give a true and fair view of the results and state of affairs of the compensation fund. Our responsibility, as independent auditors, is to audit the financial statements in accordance with the International Standards on Auditing (UK and Ireland). We report to you our opinion as to whether the financial statements give a true and fair view of the state of affairs of the compensation fund as at 31 December 2007 and of its result for the year then ended.

Basis of audit opinion We conducted our audit in accordance with the International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the Regulation of Practice Committee in the preparation of the financial statements and of whether the accounting policies are appropriate to the compensation fund’s circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations that we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion, we evaluated the overall adequacy of the presentation of information in the financial statements.

Opinion In our opinion, the financial statements give a true and fair view of the state of affairs of the compensation fund as at 31 December 2007 and of its deficit for the year then ended.

Deloitte & Touche Chartered accountants and registered auditors, Dublin, 15 May 2008 Law Society of Ireland Compensation Fund 69

Statement of accounting policies

Basis of preparation The financial statements have been prepared in accordance with accounting standards generally accepted in Ireland.

Accounting convention The financial statements have been prepared under the historical cost convention, as modified by the revaluation of investments.

Investments Investments are shown at market value. The difference between cost and market value is taken to a revaluation reserve.

Claims Provisions are made in respect of notified claims and related expenses, if the Regulation of Practice Committee considers it likely that the compensation fund is liable for such claims and expenses. Recoveries are recognised when receipt is certain.

Deferred taxation Deferred tax is accounted for, on a full provision basis, on all timing differences that have originated but not reversed by the balance sheet date. Deferred tax assets are recognised to the extent that they are regarded as more likely than not to be recoverable. Deferred tax is recognised on timing differences arising on revaluation of investments to the extent that the compensation fund has, at the balance sheet date, entered into a binding agreement to sell the revalued investments.

Pension costs Contributions to a multi-employer defined benefit pension scheme are charged in the income and expenditure account over the anticipated working lives of employee members currently in service. 70 Law Society of Ireland Compensation Fund

Income and expenditure account for the year ended 31 December 2007

Notes 2007 2006 € € INCOME

Contributions receivable 3,050,689 2,862,288 Income and returns on investments 2 708,814 651,470 Recoveries from defaulting solicitors 1,004,577 1,899,525 Disciplinary fines and investigation levies 157,410 127,904 Litigation settlement 3 300,000 -

5,221,490 5,541,187

EXPENDITURE

Provision for claims 4,199,917 2,165,579 Insurance 288,267 327,999 Costs allocated from the Law Society of Ireland 948,828 867,176 Investigation and support staff salaries and expenses 1,305,715 1,252,819 Practice closure expenses 337,800 251,161 Legal and professional fees 1,078,916 1,063,230 Portfolio management fee (64,597) (63,605) Miscellaneous expenses 29,089 15,552

8,123,935 5,879,911

DEFICIT BEFORE TAXATION 4 (2,902,445) (338,724)

Taxation 5 (42,291) (62,047)

DEFICIT AFTER TAXATION (2,944,736) (400,771)

All of the deficit after taxation arose from continuing operations.

The financial statements were approved by the Regulation of Practice Committee and signed on its behalf by:

John O’Connor, Chairman of the Regulation of Practice Committee James MacGuill, President of the Law Society of Ireland Law Society of Ireland Compensation Fund 71

Statement of total recognised gains and losses for the year ended 31 December 2007

2007 2006 € €

Retained deficit for the financial year (2,944,736) (400,771)

Movement in unrealised surplus arising on revaluation of investments (3,942,205) 890,277

Total recognised gains and losses for the year (6,886,941) 489,506

72 Law Society of Ireland Compensation Fund

Balance sheet as at 31 December 2007

Notes 2007 2006 € € FIXED ASSETS Financial assets 6 30,387,217 36,204,022

CURRENT ASSETS

Debtors and prepayments 7 35,329 98,750 Bank balances 482,674 704,454

518,003 803,204

CREDITORS (amounts falling due within one year) 8 (893,067) (1,117,166)

NET CURRENT LIABILITIES (375,064) (313,962)

TOTAL ASSETS LESS CURRENT LIABILITIES 30,012,153 35,890,060

PROVISIONS FOR LIABILITIES AND CHARGES 9 (2,424,124) (1,415,090)

NET ASSETS 27,588,029 34,474,970

REVENUE RESERVES 10 22,474,681 25,419,417

REVALUATION RESERVE 11 5,113,348 9,055,553

27,588,029 34,474,970

The financial statements were approved by the Regulation of Practice Committee and signed on its behalf by:

John O’Connor, Chairman of the Regulation of Practice Committee James MacGuill, President of the Law Society of Ireland Law Society of Ireland Compensation Fund 73

Notes to the financial statements for the year ended 31 December 2007

1. Presentation of financial statements The financial statements cover the activities of the Law Society of Ireland Compensation Fund. Separate financial statements are prepared in respect of other activities of the Law Society of Ireland.

2. Income and returns on investments 2007 2006 € € Surplus on sale of investments 315,214 280,949 Dividends and interest receivable 393,600 370,521

708,814 651,470

3. LITIGATION SETTLEMENT During the course of 2007, the Society settled a litigation case against a bank for €300,000.

4. DEFICIT BEFORE TAXATION 2007 2006 € € The deficit before taxation is stated after charging:

Auditors’ remuneration 5,500 5,250

5. TAXATION

The compensation fund is liable to income tax on investment income and gains.

2007 2006 € € Income tax 70,000 90,000 Adjustment in respect of prior years (21,709) (35,664)

48,291 54,336 Deferred tax (credit)/charge (6,000) 7,711

42,291 62,047

The effective tax rate for the year is different to the standard rate of income tax, which is 20%. The differences are explained as follows: 2007 2006 € € Deficit before taxation (2,902,445) (338,724)

Deficit multiplied by standard rate of income tax of 20% (580,489) (67,745)

Effects of:

Income not subject to taxation (981,255) (1,004,091) Expenses not deductible for tax purposes 1,631,744 1,161,836 Adjustment in respect of prior years (21,709) (35,664)

48,291 54,336 74 Law Society of Ireland Compensation Fund

6. FINANCIAL ASSETS 2007 2006 € € Listed investments – at market value

Market value at end of year 30,387,217 36,204,022

7. DEBTORS AND PREPAYMENTS 2007 2006 (amounts falling due within one year) € €

Other debtors 35,329 31,533 Taxation recoverable - 67,217

35,329 98,750

8. CREDITORS 2007 2006 (amounts falling due within one year) € €

Accruals 707,637 494,410 Amounts due to the Law Society of Ireland 185,430 622,756

893,067 1,117,166

9. PROVISIONS FOR LIABILITIES AND CHARGES 2007 2006 € € Provision for claims At beginning of year 1,371,729 1,580,731 Provision made 4,199,917 2,165,579 Claims paid (3,184,883) (2,374,581)

At end of year 2,386,763 1,371,729

Deferred tax At beginning of year 43,361 35,650 (Credit)/charge for the year (6,000) 7,711

At end of year 37,361 43,361

2,424,124 1,415,090

The entire deferred tax provision at 31 December 2007 and 2006 related to investment income, which is not taxed until received. Law Society of Ireland Compensation Fund 75

10. RECONCILIATION OF REVENUE RESERVES 2007 2006 € € Accumulated surplus at beginning of year 25,419,417 25,820,188 Deficit for year (2,944,736) (400,771)

Accumulated surplus at end of year 22,474,681 25,419,417

11. REVALUATION RESERVE 2007 2006 € € Unrealised surplus on investments:

At beginning of year 9,055,553 8,165,276 Movement during year (3,942,205) 890,277

At end of year 5,113,348 9,055,553

12. RELATED PARTY TRANSACTIONS During the year, the expenditure of the compensation fund included expenses and payroll costs totalling €2,565,674, which were recharged to it by the Law Society of Ireland. The amount due to the Law Society of Ireland at the year-end is disclosed at note 8.

13. PENSIONS The compensation fund and the Law Society of Ireland are the participants in a multi-employer defined benefit pension scheme, operated by the Society. It is not practicable to separate the assets and liabilities of the scheme and, accordingly, the compensation fund has availed of an exemption under Financial Reporting Standard 17 from making the disclosures required under the standard. The scheme provides benefits based on final pensionable pay. Contributions to the scheme are charged to the income and expenditure account so as to spread the cost of pensions over employees’ working lives. The contributions are determined by a qualified actuary on the basis of valuations every three years, using the prospective benefits method. The most recent valuation was completed as at 1 January 2007. The assumptions that have the most significant effect on the results of the valuation are those relating to the discount rate, the investment return, and the rates of increase in salaries. In preparing that valuation, it was assumed that the discount rate would be 6% per annum pre-retirement and 5% post- retirement, that the investment return pre-retirement would be 1.5% higher per annum than future salary increases, and that future salary increases would average 4.5% per annum. The actuarial report at 1 January 2007 indicated that the market value of the assets of the scheme was €10,590,000 and that the actuarial value of the assets was sufficient to cover 89% of the benefits that had accrued to members, after allowing for expected future increases in pensionable remuneration. It was recommended that the compensation fund’s annual contributions be 10.7% of pensionable salaries. The actuary carried out an update of the discontinuance position at 1 January 2007 and confirmed that the scheme was fully funded at that date, on that basis. From 1 January 2005, the compensation fund has introduced, on a discretionary basis, indexation to pensions in payment on an annual basis. Increases are the lesser of the CPI increase or 3%. Members of the scheme who wish to be considered for this in the future have increased their contribution rate to 8% of pensionable salary and the Society has increased its contribution to 18% of pensionable salaries. The pension charge for the year was €122,191 (2006: €115,667). 76 Law Society personnel

DIRECTOR GENERAL Orlaith Gallagher/Helen Mountaine (J/S) FINANCE AND ADMINISTRATION Ken Murphy Secretary DEPARTMENT Yvonne McGarvey/Colette O’Leary, (J/S) Cillian MacDomhnaill, Director of Finance and HUMAN RESOURCES Secretary Administration Maureen Seabrook, Human Resources Manager Eamonn Maguire, Secretary Gayle Ralph, Personal Secretary (Director of Pamela Ryan, Secretary Finance and Administration) POLICY, COMMUNICATION AND Maree Crowley, Executive Assistant MEMBER SERVICES Regulation Solicitors Mary Keane, Director of Policy, Communication Joan O’Neill, Senior Solicitor Accounts and Member Services and Deputy Director General Mary Fenelon, Solicitor (part-time) Seamus Turley, Management Accountant Patricia Doolan, Personal Secretary (Director David Irwin, Solicitor Edward McDermot, Accountant General) Anne Molloy, Secretary (part-time) Patrick McCormack, Accountant (part-time) Maria Hoey, Personal Secretary (President and Jean O’Cuilinn, Secretary (part-time) Sibongile Grace Tambala, Accounts Assistant Director of Policy, Communication and Member Eimear Ryan, Secretary Brigid Pender, Accounts Assistant Services) Kevin Hegarty, Accounts Assistant Emma-Jane Williams, Policy Development EDUCATION DEPARTMENT Oliver Shanks, Accounts Assistant Executive TP Kennedy, Director of Education Peggy Ryan, Payroll Clerk (part-time) Elaine Dewhurst, Parliamentary and Law Reform Lynda Sheane, Personal Secretary (Director of Executive Education) Information Technology Colette Carey, Committee Executive Geoffrey Shannon, Deputy Director of Education Tom Blennerhassett, IT Manager Anthea Moore, Secretary Sinéad Freeman, Personal Secretary (Deputy Veronica Donnelly, Computer Services Manager Mark McDermott, Editor, Gazette, and PR Director of Education) Damien Carr, IT support Executive Gretta Collins, Secretary Linda Cash, IT Support (part-time) Catherine Kearney/Valerie Farrell, (J/S) Fionna Fox, Training Executive Patricia Faulkner, IT Support (part-time) Secretary (Editor, Gazette) Mary Walker, Secretary Caroline Kennedy, IT Systems Administrator – Martina Flynn, Webmaster Jacqueline Robb, Secretary Education Centre Carmel Kelly, Web Editor Gaelle Dutordoir, Secretary Paul Mooney, Technical Support – Education Colleen Farrell, Committee Executive Maritta Moran, Secretary Centre Louise Campbell, Support Services Executive Paula Sheedy, Education Officer Adrian Buliman, Technical Support – Education Gabriel Brennan, E-conveyancing Project Tara Caffrey, Information and Diplomas Executive Centre Manager Carmel Kearney, Secretary Emer Roche, Secretary Company Formation Library Michelle Nolan, CPD Focus Skillnet Executive Rita Hogan/Carmel Molloy (J/S) Margaret Byrne, Librarian (part-time) Susan Murray (part-time) Mary Gaynor, Deputy Librarian Pauline Smyth, Secretary Lorraine Cullen Eddie Mackey, Assistant Librarian Deirdre Healy, Administration Manager Louise Gilsenan, Library Assistant Anne Walsh, Development Executive Four Courts Office Clare Tarpey, Library Assistant Julianne Ward, Secretary Mary Bissett Attracta O’Regan, Head of CPD Paddy Caulfield REGULATION DEPARTMENT Barbara Joyce, CPD Coordinator Dolores Maguire (part-time) John Elliot, Registrar of Solicitors and Director of Mary Totsi, Secretary Regulation Anne O’Toole, CPD Secretary Facilities/Internal Services Lesley Butler, Personal Secretary (Registrar of Denise Hope, CPD Secretary Tony Morgan, Manager Solicitors and Director of Regulation) Alison Egan, CPD Executive Catherine Monaghan, Secretary Tina Beattie, Executive Officer (part-time) Aideen Byrne, Secretary Carol O’Riordan, Head Receptionist (part-time) Sorcha Hayes, Executive Officer Freda Grealy, Diplomas Manager Deirdre Mooney, Receptionist Andrew O’Brien, Claims Administrator Rory O’Boyle, Diplomas Executive Kay Byrne, Receptionist (part-time) Christina D’Arcy, Secretary Tina Dwyer, Secretary Sadie Adams, Printing/Post Linda Dolan, Administration Assistant Joanne Taylor, Secretary Esther McCormack, Printing/Post Yvonne McMahon, Secretary Sharon Hughes, Secretary Desmond White, Printing/Post Joan Doyle, Receptionist William King, Head of Security Investigating Accountants Suzanne Fahey, Receptionist Eamonn Clinch, Head Porter/Maintenance Seamus McGrath, Senior Investigating Anne Walsh, Acting Administration Manager Christy Caulfield, Portering/Maintenance Accountant Caroline Bentley, Secretary Charles Mulvey, Security/Porter/Maintenance – Tim Bolger, Accountant Education Mary Devereux, Accountant Course Managers Chris Ryan, Maintenance Jim Dobson, Accountant Maura Butler Ann Murphy, Cleaning (part-time) Colm Dunne, Accountant Padraic Courtney Sheila Stone, Cleaning Noreen MacCarthy, Accountant Colette Reid Eileen Brennan, Cleaning (part-time) Munro Moore, Accountant Eva Massa Joan McKeever, Cleaning (part-time) Niamh O’Connell, Accountant Joanne Wright John Gallagher, Security (part-time) Rory O’Neill, Accountant Rachel Hession John Leonard, Security (part-time) Jim O’Dowd, Accountant Fiona Hickey Michael Troy, Security (part-time) Jim Ryan, Accountant Catherine Byrne, Secretary/Course Administrator Patrick Leahy, Security (part-time) Edward Sheehan, Accountant Philomena Whyte, Secretary/Admissions John Smyth, Security (part-time) Administrator Martin Fitzsimons, Security (part-time) Practising Certificates and Professional Zoe Donnelly, Secretary William Ralph, Security (part-time) Indemnity Insurance Catriona Moran, Secretary Rosemary Fallon, Executive Officer Alison Gallagher, Secretary (part-time) Blackhall Catering Nicola Darby, Practice Regulation Administrator Sarah Jane Stack, Secretary (part-time) Aidan Gilhooly, Catering Manager Mary Ann McDermott, Secretary Bernice Mallon Murphy, Secretary Trevor Morris, Head Chef Teresa Cunningham, Secretary Alan Adams, Kitchen Porter Practice Closures Irene Groves, Secretary Brenda Hayden, Waitress Therese Clarke, Senior Solicitor Antoinette Moriarty, Student Development Kathleen Breen, Canteen Assistant Catherine O’Flaherty, Solicitor Advisor Joan Hurst, Canteen Assistant (part-time) Tracey Butler, Secretary (part-time) Emma Cooper, Student Development Advisor Christina O’Brien, Catering Assistant (part-time) Suzanne Chesney, Secretary (part-time) Elizabeth Taaffe, Catering Assistant Anne Collins, Secretary Cork Lorraine Norris, Chef Geraldine Molloy, Secretary (part-time) Valerie Riordan, Course Leader Aaron Kearney, Commis Chef Gail Sheerin, Administration Executive Deirdre Plunkett, Supervisor, Friary Café Complaints and Client Relations Karen Henebry, Course Executive Barbara Egan, Catering Assistant, Friary Café Linda Kirwan, Head of Complaints and Client Jane Moffatt, Course Manager Frances Drum, Catering Assistant (part-time), Relations Mary Singleton, Course Executive Friary Café Tony Watson, Deputy Head of Complaints and Nora Stack, Course Executive (part-time) Client Relations Trina Murphy, Secretary/Recruitment Law Club of Ireland Helene Blayney, Solicitor (part-time) Administrator Alan Greene, Bar Manager Daragh Buckley, Solicitor (part-time) Caroline Foley, Secretary Graham Helps, Bar Assistant Martin Clohessy, Complaints Executive Catriona Barry, Secretary Eleanor Hannon, Solicitor Fiona Ni Cheallaigh, Solicitor Deborah Finn, Secretary Doreen Fitzsimons/Ursula Lynch, (J/S) Secretary

Blackhall Place, Dublin 7 Tel: 01 672 4800 Fax: 01 672 4801 DX: 79 Dublin E-mail: [email protected] Website: www.lawsociety.ie

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